Electronic trading is not the only way to handle an international order. That's the message from Doug Atkin of Instinet International, an affiliate of Instinet. Another way to buy or sell an international stock is to break up an order. That order is then traded in separate pieces: electronically, on exchange floors and upstairs, where an Instinet sales trader, acting as an agenct, calls institutions that might be willing to take the other side.
But anonymity is clearly very important. "An [anonymous] cross is the best way to do the trade," said Bob Russell, senior vice president of new business at New York-based ITG Inc. Even so, not all orders handled anonymously will match.
Thus in Australia, the institutional money manager selling a list of stocks on POSIT may send residuals that don't cross to ITG Australia, a joint venture of ITG and Austrailian broker dealer Burdett, Buckeridge and Young.
In Canada, using the trade analytics provided by ITG and partner Versus Technologies, a U.S. money manager could route his order for crossing, look for direct electronic execution on the major Canadian exchanges or send his order upstairs to ITG's Canada desk. Therefore, direct exchange execution and upstairs trading complement electronic trading, improving execution and enhancing liquidity, experts say.