Bloomberg Tradebook is seeking to address buy side wariness of dark pools and thwart high frequency gaming by showing traders where their orders are being filled in real time.
The agency broker has forged agreements with a number of dark pool operators in a bid to deliver full transparency and visibility of executions to its hedge fund and asset management clients.
The move comes amid buy side fears that high frequency traders operating in the shadows cast by dark pools are able to make split-second gains on large block order flow as it spills through liquidity channels.
Bloomberg says its B-Dark algorithm contains the first analytic to deliver real-time venue transparency in dark pools, allowing traders to execute dark liquidity orders with more control and visibility. It is aimed at small and mid-cap trading shops.
"For far too long the buy-side has tolerated a critical lack of information when trading in dark pools and that needs to change," says Raymond Tierney, the new chief executive officer and president of Bloomberg Tradebook. "We are encouraged that dark pool providers are joining us to ensure that dark liquidity and algorithmic trading is safer, more fair and open throughout the industry."
B-Dark enables traders to control more of their workflow by designating urgency levels and specifying the level of aggression with which the algorithm will seek dark liquidity. In addition, B-Dark provides anti-gaming logic, including order randomisation and real-time venue slippage analysis, to protect traders from toxic flow that sometimes resides in dark venues, says Tierney.