Dark Pools have sparked a lot of interest and discussions throughout the North American marketplace. In Canada, there are currently three players in the market - MatchNow, Liquidnet, and ICX. MatchNow is the market leader. The TMX Group Ltd., doesn’t have a dark pool in Canada.
The difference between a traditional or “lit” market is that in the dark pool, securities are traded anonymously. Larger investors utilize dark pools to sell off large quantities of stock. These sales within a dark pool are often to avoid alerting other investors of the sale prior to taking the action. The attraction of dark pools is this anonymity that helps an investor find the best price for the shares.
Recently, Nasdaq announced plans to launch a new Canadian Dark Pool, Nasdaq CXD. The opening of this new market will take place on Monday, October 31st. Nasdaq has proven to be relentlessly committed to the Canadian marketplace, through recent acquisitions such as Chi-X Canada. Nasdaq is launching Nasdaq CXD due to customer demand for an alternative source of non-displayed liquidity. “It all started with our customers asking for it,” said Dan Kessous, Chief Executive Officer of Nasdaq CXC.
Nasdaq CXD will deliver:
- Price improvement and at the touch opportunities (or size improvement)
- Competitive, low pricing
- Broker priority
- Seamless, easy-to-access technology
As part of a special, introductory pricing promotion, Nasdaq CXD is offering free transactions for the first four months of trading. For more information on Nasdaq CXD, please contact us at ca.sales@nasdaq.com or 888-310-1560.
Interested learning more about Dark Pools? Investopedia uses this description: “Dark pools are an ominous-sounding term for private exchanges or forums for trading securities; unlike stock exchanges, dark pools are not accessible by the investing public. Also known as “dark pools of liquidity,” they are so named for their complete lack of transparency. Dark pools came about primarily to facilitate block trading by institutional investors, who did not wish to impact the markets with their large orders and consequently obtain adverse prices for their trades.”
Learn more about Dark Pools from Investopedia here >
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
