The business of US equity alternative trading systems is a fascinating one.
There are a few dozen ATSs operating today, each offering the proverbial better mousetrap for traders to buy and sell efficiently, without just plopping their order on a lit exchange.
The ATS that "makes it" in terms of carving out a couple percentage points of market share is the exception to the rule, as for every Intelligent Cross, Purestream and OneChronos, there are probably 10 or more ATSs that never get beyond the drawing board.
But just establishing your venue isn't enough, as evidenced by Intelligent Cross's new product announcement today. There's no standing still in this business.
And as these emerging venues battle each other for relevance and permanence, there are always newcomers on their way, for example Joe Wald with Mosaic Platforms and Khody Azmoon with BLOX Markets.
As Mike Bloomberg used to say, he wasn't afraid of the big established competitors — he was afraid of the "two guys in a garage" who were developing the next killer product.
Who knows which new ATS will be in Finra's top ATSs in a few years' time, but there will most assuredly be at least one name we don't know.
Terry Flanagan, Editor
