Move over Credit Suisse, Barclays is now king of the dark pools. Technically.
After a long buildup during which it trailed Credit Suisse Crossfinder, Barclays LX is now top of the heap. However, before Barclays pops the champagne corks, this may be due to a technicality, as the Swiss bank stopped reporting its dark pool volumes in April. Credit Suisse declined to say why its staying mum with its dark pool numbers.
See Also:Largest Dark Pool Goes Dark on its Data
Amid a multiyear retooling effort and upgrading of its technologies, Barclays LX dark pool gained market share that has propelled it to top place among its peers, according to reports from both Tabb Group and Rosenblatt Securities.
When the article was originally published, 107 million shares-16 percent of all volume on dark pools-were traded each day on LX, according to the Tabb Group Liquidity Matrix, a monthly liquidity and pricing report for U.S. equities exchanges, electronic communications networks, dark liquidity pools and crossing networks. Coming a close second among the brokers was Goldman Sachs Sigma X, which traded 71 million shares or 11 percent of dark volume.
Rosenblatt Securities, another tracker of U.S. dark pools, reported in its February analysis that LX grabbed 1.41 percent of total consolidated volume of 6.4 billion shares traded daily on all lit or dark venues. That, too, trailed only Crossfinder, which snared 1.88 percent. After Crossfinder and LX came Goldman Sachs Sigma X, UBSs ATS and Deutsche Banks Super X pools.
Bill White, head of equities electronic trading at Barclays, told Traders Magazine that the firm laid out a plan two years ago to overhaul their offering end to end, gain market share and provide clients with the best electronic trading tools in the market. Gaining the top spot among the broker-sponsored offerings is the product of all that work and effort.
In 2009, its LX dark pool was languishing in 10th place among its peers. By 2010, it jumped three spots to number seven, and then in 2011, it climbed yet again to fifth place. By January 2012, LX had once again moved upward, joining the ranks of Knight Capital Groups Knight Link and Deutsche Banks Super X. But the upward trajectory continued throughout the year, as LX climbed over Knight and Deutsche Bank by December.
With momentum on its side, LX vaulted over Goldman Sachs Sigma X this year to rest at number two, firmly behind Crossfinder. And getting into and unseating Goldman in that uppermost of echelons is something that hasnt been done since 2007, said Tabb Group analyst Cheyenne Morgan. She pointed to the firms revamping of its electronic products, such as algorithms and its smart order router, as well as its active promotion of technology, as the keys to success.
