Liquidnet, the alternative trading system (ATS) built exclusively for institutional investors, says that it traded its 500 millionth share yesterday.
The ATS also cites second-quarter figures from the Plexus Group which indicates that Liquidnet saved its members approximately $26 million in trading costs for Nyse and Amex listed stocks and approximately $28 million in trading costs for Nasdaq listed stocks, compared with other means of executing trades through intermediaries.
"Many of our institutional clients have begun to use Liquidnet and realise the benefits of anonymous trading and the reduced market impact costs that result when crosses occur without intermediaries," says David Hall, president of the Plexus Group, a Los Angeles-based transaction process adviser to investment managers, plan sponsors, and brokerage firms.
Based upon data from the second quarter of 2001, the average trade executed on Liquidnet cost 26 basis points less than Plexus execution benchmark for exchange-listed stocks and 67 basis points less for Nasdaq-listed stocks, Hall says.
Seth Merrin, Liquidnet founder and CEO, claims average trade size over the ATS is 71,000 shares compared to an average of 800 shares for all other exchanges and execution venues. Ninety percent of Liquidnet members' trades have been completed within the bid/ask spread, he says, indicating their trades are being completed without moving the market.
Merrin adds: "With six large institutions signed last week, we crossed the 100 member threshold in just six months."
Liquidnet members manage more than $3.7 trillion in aggregate equities and their average size exceeds $35 billion, he says.
Glenn Schorr, financial services analyst for Deutsche Bank, comments: "Liquidnet's ramp-up to 500 million shares is the fastest of any ATS I've seen."