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December 14, 2010

RealTick Tackles Dark Pools

By Peter Chapman

RealTick is adding functionality to its flagship execution management system that allows the buyside to take more control of its orders resting in broker dark pools.

The mechanism, called Liquidity Scope, lets a buyside trader divvy up a large order among multiple dark pools. The technology will then monitor the performance of the dark pools. If it detects that trades are being completed at a faster clip in one dark pool, for instance, it may remove the orders from the other pools and route them to the better-performing pool.

"The mechanism will pull away from the dark pools that are not providing the trader with liquidity, and it will rebalance the order to where it is getting done," said RealTick chief executive Stuart Breslow.

Behind the new functionality is a desire on the part of RealTick's hedge fund customers to gain more control over the handling of their orders. Many on the buyside are concerned about the presence of high-frequency traders in dark pools and their ability to sniff out information implicit in their large orders, Breslow said.

 

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