Fidelity Capital Markets Services, Fidelitys institutional trading division, has expanded its liquidity network with access to two new trading venues for DarkSweep, Fidelitys algorithmic trading strategy, and CrossStream, the companys alternative trading system (ATS). The new trading networks accessible to DarkSweep and CrossStream users are Goldman Sachs SIGMA X and UBS PIN ATS.
In addition to accessing the aggregated liquidity of Fidelitys brokerage businesses, with nearly $2 trillion in assets and $3 billion of equity trading per day, clients can now leverage the combined liquidity of 28 third-party firms, including many of the ATSs of the top U.S. brokerage firms operating by trading volume.
“In todays competitive environment, access to non-displayed liquidity is critical to a firms ability to maintain anonymity and minimize the market impact of their trades, says Mark Haggerty, president, Fidelity Capital Markets Services. “By continuously expanding our liquidity network and providing clients with a single point of entry into the leading non-quoted venues, we are consistently achieving industry-leading fill rates — including over 50 percent for clients using DarkSweep.”
DarkSweep is Fidelitys algorithmic trading strategy that simultaneously aggregates liquidity from non-displayed liquidity pools and ATSs into a single entry point and rebalances orders to optimally source liquidity in real-time. It only executes within the National Best Bid and Offer (NBBO), providing price improvement for clients trades. In addition, users are able to customize their implementation of the algorithm by specifying which third-party venues to access.
CrossStream anonymously matches Fidelity clients buy and sell orders against the diverse order flow of Fidelitys brokerage businesses, without publishing bids and offers and before clients orders are routed to the market. It is designed to offer users the ability to increase fill rates by providing access to both large, liquid securities that can be moved in bulk and a wide range of smaller, less-liquid issues that can be difficult to trade in the public markets.
Extending access to CrossStream to additional external trading ounterparties allows Fidelitys institutional clients to leverage the liquidity of Fidelitys brokerage business and that of the external firms. Like DarkSweep, the platforms sophisticated order-matching logic for brokerage clients buy and sell orders is conducted within the NBBO to help ensure quality executions with minimal market impact. CrossStream offers a range of advanced order types, including pegging and discretion, minimum execution quantity, and intermarket sweep (ISO) orders.
“In todays fragmented trading environment, we believe that a philosophy of open access that seeks to aggregate as much liquidity as possible is critical to delivering best execution,” says Jeff Brown, senior vice president, Fidelity Capital Markets Services. “Regardless of how our clients define execution quality, they can count on our electronic brokerage products to help them achieve their trading objectives.”