ConvergEx Group has launched a dynamic order routing strategy that allows clients to designate a percentage of an order to be sent to IEX, with the remainder going to ConvergEx’s Darkest algorithm.
The algorithm searches for liquidity among more than 20 other non-displayed venues.
ConvergEx is offering this strategy after analysis of IEX executions showed that client orders were being successfully protected from latency arbitrage.
The Darkest + IEX dynamic routing strategy, developed in collaboration with IEX, allows clients to split their orders, explicitly routing either 25 per cent or 50 per cent of a trade to the IEX ATS, with the balance of the order being sent to ConvergEx’s Darkest algorithm. With the Darkest + IEX strategy, if either part of the order is filled, the remainder is dynamically reallocated according to the pre-determined percentage.
“ConvergEx began routing orders to IEX in November of last year and we decided to expand our relationship after our analysis confirmed that our clients were receiving excellent execution quality in their venue,” says Oliver Sung, ConvergEx Group’s head of US electronic execution. “With the addition of Darkest + IEX to our suite of trading strategies, we are able to provide clients with even greater control over their orders.”
“IEX’s market is designed to eliminate structural inefficiencies and improve trading performance. ConvergEx’s data offers third-party evidence that we’ve succeeded in effectively eliminating latency arbitrage,” says Brad Katsuyama, IEX president and chief executive officer. “The Darkest + IEX strategy provides an exciting new way to access our marketplace, and shows that ConvergEx shares our commitment to helping investors take charge of where their orders are executed.”
ConvergEx’s electronic clients can access IEX through the Darkest and Abraxas algorithms, and high touch clients can connect to the IEX market via the ConvergEx sales trading desk.