Bryan Harkins is President of IEX Group.
What was the highlight of 2024?
2024 was a major year of change for displayed trading on IEX as a result of added functionality and enhancements to core offerings like our Signal. We are very proud of our market share growth in displayed trading, which has increased approximately 3x since June, allowing us to become one of the top exchanges for displayed liquidity as measured by our time and size at the inside in both the S&P 500 and Rusell 3000. We also saw growth in non-displayed trading as demonstrated by the fact that we currently have the largest notionalmidpoint market share in single stocks compared to all other exchanges. Last, but certainly not least, our plan to launch a U.S. Options Exchange is one of our top highlights of 2024.
What are your expectations for 2025?
IEX spent the last decade innovating by building technology designed to protect market participants from adverse selection while maximizing best execution. We expect to continue to leverage our expertise in building equities exchange technology and our obsession with market quality to drive our growth. Conversations over the past year underscored that the successful features of our equities exchange—proprietary solutions to help resting orders and order performance optimization—will be key differentiators in how we protect clients from adverse selection as they navigate the challenges of a rapidly growing U.S. Options landscape.
What trends are getting underway that people may not know about but will be important?
While IEX’s recent growth in displayed trading was a highlight in 2024, we think the growth in non-displayed trading for exchanges is a trend to watch. For example, IEX expanded its exchange midpoint intraday market share in single stocks by 20% from earlier this year. One of our most recent blog posts highlights how IEX continues to deliver high-quality liquidity, combining growth with better execution outcomes.
While some traders may think of ATS and similar dark venues as the primary source of midpoint block trades, conducting these trades on exchanges presents a unique opportunity. ATS trades are not “attributable” to the tape following an execution, meaning traders don’t know which ATS or other off-exchange venue a block trade occurred on unless they were a party to the trade. Conversely trades on exchanges like IEX are attributable to the tape, allowing traders to use “heat maps” to direct flow towards a lit venue. Traders who prefer the insights from this more fulsome public data will gravitate towards venues that provide quality midpoint and block trading.
What are your customer’s pain points and how have they changed from 1 year ago?
We have always believed in our product and the quality of our market. However, our customers gave us great feedback that enhancing our fees and economics for displayed liquidity could create a powerful combination of product, performance, and economics. That led to our introduction of tiers for enhanced rebates, which propelled our growth through the second half of this year. This was led by the success of D-Limit, with $4.8T of notional value traded to date. This growth was achieved without sacrificing the market quality that we are known for.
As for options, the asset class remains one of the fastest growing in the world. Options trading volume (ADV) increased by 145% from 2019 to 2024, and by 8% from 2023 to 2024 alone. While this rapid expansion is encouraging, it is not without its challenges—particularly for market makers dealing with the risk management challenges that come with this proliferation of data. We heard from market participants that adverse selection and “pick off” risk impact market quality and the quotes on screen for investors. This feedback drove IEX’s multi-asset class expansion. We look forward to collaborating with the Options industry to deliver tools and solutions that meet their needs and help with their challenges.
