Barclays Capital has started to offer its institutional customers the ability to trade blocks electronically. The move is part of a mini-trend among bulge bracket firms to give the buyside quick access to large orders.
Under the new Barclay’s service, called ‘DirectEx,’ buyside traders only need access to the indications of interest listings on a Bloomberg terminal to make a trade. Barclays’ traders are making some of their IOIs “actionable,” which makes it little different from a firm quote. Buysiders just click one of these IOIs and a trade is automatically carried out.
“It acts like an electronic platform,” explains Barclays spokesman Mark Lane. “The client can click on the screen and execute the blocks there and then.”
Both Barclays’ traders and Barclays’ customers can post their indications on the Bloomberg screen. Barclays’ clients can see IOIs posted by both Barclays’ traders and other clients. Barclays’ traders can only see their own positions.
Although it is electronic, DirectEx is a service of Barclay’s high touch cash equities desk, rather than its low touch electronic desk. Once one of Barclays sector traders sees a trade occur under DirectEx he may contact the customer to discuss trading more shares.
DirectEx is one of a growing number of electronic block trading devices on the Street. Merrill Lynch recently launched a dark pool service called ‘Instinct Natural.’
Both Citigroup and Credit Suisse have offered their versions for a few years. Citi launched TotalTouch over two years ago. Like Barclay’s DirectEx, it too lets buyside traders automatically execute against “actionable” IOIs.
