US institutional broker Weeden & Co has teamed with New York's Pragma Financial Systems to launch OnePipe, a single crossing network that taps up to 25 dark liquidity pools.
OnePipe was developed through Pragma @ Weeden, the two firms' joint algorithmic trading service. It offers institutional investors access to more than 25 dark pools, crossing networks, and streaming liquidity venues from a single, integrated source that can be accessed from the trader's desktop.
The system allocates orders among all non-displayed venues based on both historical and trade date liquidity, without preference to destination or venue fees. OnePipe also manages the rules of each liquidity source, such as minimum share size, resting orders versus pinging, and cross times.
Weeden says the system has strong anti-gaming logic built in and monitors every liquidity venue for execution quality.
"We were finding that as the dark pool universe grew, our clients were having problems accessing liquidity efficiently and in an intelligent manner," says Douglas Rivelli, managing director at Weeden & Co. "They were targeting a small number of destinations with the highest crossing rates but missing liquidity at smaller destinations because monitoring every venue was becoming too difficult. We wanted to develop a solution that would expose client orders to the greatest number of passive liquidity sources to give them the greatest chance of trading large blocks with minimal market impact."
The result is crossing rates as much as 4 times higher than average dark pool crossing rates, claims Rivelli. Clients receive a daily summary report detailing execution rates at the various venues and other performance data.