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CEO CHAT: Global Liquidity's Lang Says Dark Pools Are “Clean”

Traders Magazine Online News, March 23, 2017

John D'Antona Jr.

This pool is - clean.

And so is this one. And the list goes on.

That’s the pronouncement of Tim Lang, Chief Executive Officer of Red Bank, NJ – based Global Liquidity Partners, a broker-neutral execution broker and technology firm that serves both the buy- and sell-side. In a blog shared with Traders Magazine, Lang said that all dark pools, based on his firm’s analysis, are “clean.”

Tim Lang

“GLP constantly checks and scorecards the quality of executions from each source of liquidity in the US equity market,” explained Lang. “In the past, we have disconnected certain sources because of detected gaming or toxicity.”

If you would like to contribute and be a part of this series, please email jdantona@marketsmedia.com

By definition, toxicity is the degree to which a substance can damage an organism. It can refer to the effect on a whole organism, such as an animal, bacterium, or plant, as well as the effect on a substructure of the organism, such as a cell. In trading, toxicity is typically tracked as a negative price movement a couple of seconds after a trade (or fill) happens. By that measure any trading activity typically results in some sort of negative market impact. – either not getting filled or getting filled at a less-than-optimal price. This impact is often associated, but most certainly not limited to, high-frequency traders or other so-called predatory traders.

Lang said that perhaps because of publicized fines or increased regulatory scrutiny in the space, it is his opinion - based on GLP’s own internal studies - that each of the ATS’s [Dark Pools] are “clean.”

“We do not detect bad behavior in any of the dark pools,” Lang said.

 

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