Liquidnet, the global institutional trading network, saw a 23% month over month increase in overall US trading volume. Year-to-date through October, volume was up 7% from 2010.
Liquidnet also dominated block trading. On average, when Liquidnet traded a stock, it represented 34% of the day’s market block volume in that stock. In addition, 58% of all US stocks traded through Liquidnet were either the 1st or 2nd largest print of the day in that security. On average, when a small cap security was negotiated, Liquidnet was the 1st or 2nd largest print of the day 77% of the time and 82% of the time in micro cap securities.
"While a more volatile market tends to decrease institutions’ willingness to trade in the long run, it does cause short term, 30 to 60 day increases in block volume. This has been thematic since the financial meltdown of 2008. With trading opportunities abound, institutions took advantage of block liquidity spikes and the opportunity to trade directly with other like-mind long term investors as earnings season commenced," says Brian Williamson, Senior US Equities Analyst at Liquidnet.
Liquidnet continues to be the destination of choice for institutional investors to access block liquidity around the globe. Liquidnet’s average execution size is more than 100 times than that found on the retail exchanges in the US and 76 times larger than other off-exchange trading venues in Europe. In Asia, Liquidnet’s average trade size in October was in excess of USD1 million, representing over 120 times the average execution size on the lit markets.