Blocks are back.
With the New Year already a week old, Bloombergs BPool, its block trading platform jointly formed with BIDS Trading, has seen a steady rise in the amount of larger size (block) trades, according to the operator.
Jim White, global head of operations at Bloomberg BPool told Traders Magazine that activity within the venue has steadily increased since its inception over one year ago. White added it has captured 5 percent of U.S. equity block trading and has an average trade size of 40,000 shares.
See Also:Bloomberg Looks to Attract Blocks via BPool
According to a recent Tabb Group report, block trading volume currently represents about 17 percent of total daily equity traded volume in the U.S., up from 14 percent in 2008.
BPool usage has grown steadily since it launched in September 2012, White said. Our buyside clients want to trade blocks when they can, and do so efficiently and anonymously. BPool provides access to a unique liquidity pool and trading tools that ensure traders don’t miss an opportunity. We think these are key advantages that will continue to drive BPool’s success in the coming year.
A study conducted by Bloomberg earlier this year found that nearly seven in 10 institutional traders would prefer to trade in blocks if they could find the right venue. More than two-thirds of regular block traders use a service specifically designed for trading blocks, the survey also noted.
Bloomberg created BPool with BIDS Trading to help buyside traders by giving them more control over the execution of equity block orders of 10,000 shares or more. Since its inception, BPool has been adopted by more than 150 buyside firms.
BPool is an opt-in service that enables Bloomberg and BIDS Tradings ATS clients to access liquidity from Bloombergs many equities trading platforms, including AIM, EMSX, and SSEOMS as well as BIDS ATS. BPool uses the sponsored-broker model created by BIDS Trading, which gives traders the flexibility to pay commission dollars to the broker of their choice.
I sometimes get matches in BPool without matching in any other crossing venue, meaning it is truly unique liquidity that I would not have gotten if I did not have BPool access, said Dennis Fox, the director of equity trading at Munder Capital Management, a Michigan-based asset manager. It is a user friendly application where I can react to matches when they are presented to me. When I get executions, I am able to credit research brokers on each trade.
