This article, IMO, makes a great follow-up to the "[s]hrinking role of the Sales Trader" article. It's amazing.
Year-end Statistical Data Shows LiquidNet Provided
Unparalleled Execution Size Since 2001 Launch
NEW YORK, January 14, 2002
Liquidnet, the alternative trading system (ATS) that allows institutions to trade large blocks of stock anonymously, today released statistical data for its first eight months of operation since launching April 10, 2001.
"The data show Liquidnet is a powerful tool that enables institutions to execute trades that in many cases would be impossible in today's environment," said Seth Merrin, Liquidnet founder and CEO. "Liquidnet brings natural contra parties together and lets them negotiate in complete anonymity. No information disseminated, no price movement --that's the ideal trading scenario for institutions. And, our backlog of 49 Members awaiting implementation will increase our online Member base by another 67 percent."
Merrin added that Liquidnet's successful launch "testifies to our Members' desire and Liquidnet's ability to reduce or eliminate hidden transaction costs, improve performance and meet 'best execution' obligations mandated by the Securities and Exchange Commission and Association for Investment Management Research."
Year-End Statistical Review
"Data for 2001 confirm that Liquidnet is the fastest-launching ATS or ECN that I have seen," said Glenn Schorr, CFA, senior analyst covering brokers and asset managers, Deutsche Bank Alex. Brown.
Liquidnet launched on April 2001 with 38 Members. It now has 73 "live" Members with another 49 Members signed and awaiting connection to the network. The Liquidnet Member community manages more than $4 trillion in equities, with an average Member equity size of $36 billion.
660 million shares were executed since launch on April 10, 2001, for an average of almost 4 million shares per day. Liquidnet's average daily volume increased each quarter and now averages more than 6 million shares per day.
In sharp contrast to the typical ECN (electronic communications network), more than 60 percent of the shares traded are NYSE listed, indicating that Liquidnet's institutional Members are seeking alternative, lower-cost, anonymous ways to electronically trade NYSE-listed stocks.
Based on a widely used benchmark of per share transactions costs, Liquidnet estimates its Members in aggregate saved $35.7 million trading NYSE and Amex listed stocks, and $36.7 million trading OTC stocks. In terms of kinds of stocks:
- 39 percent were small-cap, with an average execution size of 37,400 shares
- 43 percent were mid-cap, with an average execution size of 62,400 shares
- 18 percent were large-cap, with an average execution size of 92,200 shares
More than 90 percent of trades were executed within the spread and Liquidnet continues to lead all execution venues with an average execution size of 65,178 shares.
About Liquidnet:
Liquidnet is an alternative trading system (ATS) for large institutional investors designed to allow the trading of large blocks of stocks anonymously with minimal market impact costs. Liquidnet's unique architecture and model have solved the major problem facing B2B exchanges and ATSs-building a critical mass of liquidity. Through advanced Internet-enhanced technologies, Liquidnet has created a community of large institutions that brings liquidity to the trader, reversing the current paradigm of searching for liquidity.
Liquidnet is a registered broker/dealer, headquartered in New York City, with offices in Boston, Chicago and Los Angeles. Additional company and product information is available online at www.liquidnet.com. |
