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Ray Ross, co-head of electronic trading at BMO Capital Markets, is looking forward to continued innovation in US equity markets this year after new venues and order types launched in 2020.
Ross told Markets Media there has been a lot of market microstructure change over the last few years that has allowed the broker to implement trades faster and with lower impact, to the benefit of end-investors.
Ray Ross, BMO Capital Markets
âWe have seen lots of good progress and we are certainly eager to see what is coming next,â he said.
Three exchanges launched in the US in September 2020 â Members Exchange (MEMX), MIAX Pearl Equities and Long Term Stock Exchange (LTSE) â taking the total to 16.
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Doug Cifu, chief executive of Virtu Financial, the market maker, broker and technology provider, defended payment for order flow as retail investors receive price improvement and the business model has allowed markets to become more democratized.
Cifu was interviewed in a webinar today by Larry Tabb, head of market structure research at Bloomberg Intelligence as part of the Equity Trading Research Series.
Looking to talking with @ltabb about how retail market making really works…and maybe some hockey and @FeltmansConey too? @VirtuFinancialhttps://t.co/PuBgLBzNQ0 Doug Cifu (@Dougielarge) February 22, 2021
They were responding to Congressional hearings last week into the volatility of shares in GameStop rising 1,600% last month. Retail investors drove up the price after users of online forum Reddit had posted that hedge funds had taken a large short position in the US video game retailer. Trading app Robinhood was forced to temporarily suspend tr
Off-Exchange Trading To Continue To Grow In US
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There will continue to be an increase in off-exchange equity trading volumes in the US, after record volume last year, according to Greenwich Associates’
Top 2021 Market Structure Trends report.
Trade Reporting Facilities (TRFs) run by Nasdaq and NYSE capture trading off-exchange such as in alternative trading systems, internalizers, internal matching by central risk books and single-dealer platforms.
The consultancy said in a report that the growth in TRF volume follows the large rise in retail trading (and resulting increased internalization of retail order flow) last year, but also highlights other trading systems and functionality offered by brokers and alternative trading systems.