The ‘SmartDark’ algo has been designed to help firms create a liquidity-seeking strategy.
Agency execution specialist Liquidnet has released in the U.S. a new algorithm for its equities platform. Dubbed SmartDark, the algorithm is intended to help institutional traders prioritize “routing to venues with larger execution sizes and better price stability,” officials say.
“SmartDark incorporates a variety of yield and quality metrics to give traders an optimal blend of targeted liquidity-seeking strategy and maximum liquidity exposure, resulting in the opportunity to trade on high-quality venues with better price stability,” according to the announcement.
As part of the Liquidnet Dark space, the algorithm “leverages the existing framework to offer a new tool to enhance traders’ execution abilities. Liquidnet Dark has an average block execution size of 28,000 shares for all trades crossed by Liquidnet and an overall block participation rate of 44 percent,” officials say.
“Today’s markets remain volatile and complex for buy-side traders to navigate. … SmartDark is a great illustration of our ability to develop innovative solutions for the buy side that help traders access liquidity,” says Alan Polo, head of sales and trading, Americas, in a prepared statement.
Liquidnet’s network has grown to include more than 1,000 institutional investors and spans 57 markets across six continents, officials say.
Interdealer broker TP ICAP Group plc acquired Liquidnet in 2021. TP ICAP is a markets infrastructure and data solutions provider serving buyers and sellers in wholesale financial, energy, and commodities markets, officials say.
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