April 11, 2012

Liquidnet, an operator of a venue that enables institutional asset managers to anonymously execute block trades, said first-quarter volumes in the U.S. soared 25 percent above the year-earlier period, even as overall volumes declined throughout the nation's marketplace.

"This was the largest quarter-over-quarter increase in the U.S. since Q1 '06 and occurred while overall market volume declined eight percent," Liquidnet analyst Brian Williamson said. "With lower volatility in the market, traders have been less concerned about reversion and more apt to trade larger blocks of stock."

For more on [why orders are increasingly moving off exchanges.]

Williamson noted that the most successful traders had themselves well-positioned in advance of the market rally that kicked off in December.

Liquidnet added its Asia-Pacific contingent also enjoyed strong growth during the quarter, with volumes in Australia and Indonesia surging a respective 52, and 67 percent. Meanwhile overall principal traded in the region jumped 49 percent above the year-earlier quarter in trades worth $4.5 billion.

"Investors around our network have also benefited from the growing interest from institutional investors around the world who are clearly encouraged by signs of improved macro conditions in the region," said Lee Porter, the head of Liquidnet's Asia-Pacific segment.

"For Asia-Pacific, this has translated into a larger liquidity pool and a higher average execution size, driven by greater conviction coupled with the search for quality liquidity."

The news about Liquidnet comes on the heels of a report by market research firm Tabb Group which noted that nearly 30 percent of all order flow in March was done outside of exchanges. Tabb's report added that its March figure is part of a larger trend in which a growing number of trades are being done off exchange.

ABOUT THE AUTHOR
As the Senior Editor of Advanced Trading, Justin Grant plays a key role in steering the magazine's coverage of the latest issues affecting the buy-side trading community. Since joining Advanced ...