Quote MTF, the lit trading venue for pan-European equities, plans to launch in June a liquidity-on-demand hybrid book to be called QLX.
On QLX, the liquidity seeker triggers a request for trade for a symbol without indicating price, side or size. Participants can respond to the request for trade by making a market for the symbol. The liquidity seeker interacts with the market according to pre-defined, price-time rules.
Quote MTF says the model offers liquidity seekers opportunities for increased liquidity discovery and price/size improvement while minimizing information leakage.
The liquidity seeker is initiating a 20-millisecond auction, which levels the playing field on latency, generates liquidity-on-demand, and because firms are reacting to only genuine order flow, QLX reduces messaging and load on technology, says Tamas Madlena, CEO of Quote MTF. Importantly, because no information is leaked to market, there is minimal market impact.
QLX addresses a pressing business need, as you are effectively building up a matrix of peer-to-peer relationships so you can judge the results for yourself. It means there is no longer a need to bracket firms together and call them toxic, which limits perfectly legitimate and valuable streams of passive liquidity.
(CG)