The block trade is coming to Brazil.
Or at least that’s what ITG hopes to offer its institutional clients who trade Brazilian equities. The independent agency broker and research house is launching its POSIT Alerrt Brazil crossing network in the South American country to better serve the liquidity needs of its investors, both in the U.S. and abroad.
Brazil is the largest South American equities trading market, thus the launch of the network. Brazil represents approximately two-thirds of the value traded in Latin America, and while average trading costs are lower than other regional markets at around 50 basis points, they are still significantly higher than U.S. trading costs.
“Traders in Brazilian equities are faced with concentration of liquidity and lack of market depth for many stocks,” said Eric Blake, ITG Managing Director and Head of Latin America. “POSIT Alert Brazil is a modern version of the traditional ‘upstairs block cross’ executed on exchange. It offers an efficient, cost-effective solution to maximize liquidity while also managing the market impact of trades.”
Since the general opening in late May 2014, the pool of liquidity in POSIT Alert Brazil has grown to a daily average of $200 million, with average executed trade size of approximately $900,000.
ITG said that POSIT Alert Brazil is not a dark pool like its U.S. cousin, rather it employs proprietary trade matching technology to execute crosses on Bovespa, the nation’s leading public stock exchange, adding to public and transparent liquidity. Liquidity in Brazil is concentrated on the exchanges, with the top 10 listed companies accounting for over 50 percent of exchange trading volumes.
POSIT Alert is already a successful tool for buyside traders in 33 countries across the Americas, Europe and the Asia Pacific region, connecting the trade blotters of over 2500 traders across more than 560 firms.
