New York based Pipeline Trading Systems is to release an alternative trading system for firms to trade large blocks of NYSE-listed companies, Nasdaq stocks and Exchange Traded Funds (ETFs) in single executions.
The Pipeline platform allows users to trade large blocks without letting an order be detected by traders who are simply gaming, says the firm. Because it deals only with firm orders, not indications of interest (IOIs), and enforces a large minimum size, the system aims to tap into the liquidity that exists between brokers, hedge funds and other institutions without encouraging predatory strategies.
The vendor says Pipeline has been alpha tested by over a dozen institutional investors and brokerages, and is being offered to other firms interested in participating in the beta test. The system is scheduled for full deployment in the spring of 2004.
Fred Federspiel, founder of Pipeline parent company e-Xchange Advantage and CEO of Pipeline Trading Systems, says: "Where other marketplaces generate fragmentation, opportunities to front-run, penny jump, or back away, Pipeline generates trades."
The marketplace has won financial backing from BiosGroup, Nasdaq and Instinet Global Holdings. The eXA board of directors consists of Fred Federspiel, Alfred Berkeley (ex-president and vice chairman of Nasdaq), Michael Brown (ex-CFO, Microsoft), and BiosGroup chairman Robert MacDonald.