Pipeline Trading Systems LLC, a leading electronic brokerage for institutions, announced today the deployment of Liquidity Builder™, a new service that monitors liquidity across multiple cash equity and options markets, and predicts the availability of Pipeline-qualified large blocks. The aggregated small order liquidity is offered at the NBBO in Pipeline-sized blocks of the underlying equity security.
"Institutional traders are always looking for more block liquidity. As high-frequency trading increases, and the options markets become more automated, we want to be able to tap this liquidity when it can help us reduce transaction costs for our investors," said Dennis Fox, of Munder Capital Management. "Pipeline's new Liquidity Builder helps us access that liquidity on our terms: the liquidity is brought to me and I can choose to react to it or decline if the timing/price is not right."
"With this new service, we can now help our institutional customers uncover fragmented liquidity across multiple cash equity and options markets that can be aggregated into large blocks and immediately captured at the NBBO," said Fred Federspiel, CEO of Pipeline. "Our experience interacting with high-frequency trading in the Algorithm Switching Engine and our acquisition of 3D Markets' assets have made this service possible. We're uncovering a treasure trove of information behind the fire hose of quote and trade data, in both equity options and the underlying assets."
Pipeline's Block Market™, with Liquidity Builder and Contra Targeting™, provides a unique array of liquidity solutions to its institutional customers, increasing the potential for large block executions when traders require them. Simultaneously, Pipeline's Algorithm Switching Engine provides a unique way to leverage algorithms with or without concurrent search for a matching block.
The new service is being offered in conjunction with an affiliate of Pipeline Trading Systems LLC which was set up specifically to experiment with technology for accessing and aggregating liquidity across multiple markets. The Pipeline affiliate packages small order liquidity into single 10,000, 25,000, 100,000, and 250,000 share blocks of the underlying equity security.