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November 11, 2008

POSIT Shoots for Blocks During Downtime

By James Ramage

ITG wants to increase liquidity for block trades at the most illiquid time of day: right after lunch. The agency brokerage and technology firm has introduced a new midday crossing session, called Power Match, to its dark pool suite to help its clients concentrate block liquidity in the early afternoon.

The new point-in-time cross-part of the firm's POSIT crossing suite-takes place at 1 p.m. EST, said Chris Heckman, head of U.S. sales and trading at ITG. The crossing session is for block orders of 10,000 shares or more only.

"This is an attempt to aggregate liquidity at a point in time during the trading day when volume is actually fairly light, and our clients could actually use the help in finding natural liquidity," Heckman said.

ITG's clients had been expressing frustration with finding natural block liquidity, Heckman said. One competitor said he was unsure how successful the match would be, given the low level of liquidity at that time of day. However, he viewed the move as a positive for clients, because it offers them another opportunity to find liquidity in size.

ITG uses existing POSIT Match technology for the Power Match session, Heckman added. There are now 10 intraday match times and one after-hours cross at 4:15 p.m.

Orders arrive in the POSIT trading suite in a confidential fashion and try to find a contra side order within the system. They match at the midpoint of the national best bid or offer.

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