Turquoise Global, the London Stock Exchange Group’s pan-European trading venue and LeveL Markets, which operates the US Luminex alternative trading system (ATS), have partnered to offer a new order type and “unique liquidity.”
In April this year Turquoise and LeveL Markets said in a statement that the UK venue will offer a new block Manual Conditional order type to the buy side and nominated broker members through Luminex’s user interface. Adam Wood, chief of Turquoise Global, told Markets Media that the initial meeting was timely as the platform was thinking about how to grow Turquoise’s dark book offering.
Adam Wood, Turquoise
“Turquoise is a first mover in the electronic block trading space, and we wanted to expand our offering into manual too,” he added.
Wood continued that it became clear that through its Luminex service, LeveL Markets would be an ideal partner. Luminex is already connected to key EMS (execution management system) and OMS (order management systems providers, has a really good client base, and is one of the top block trading venues for the buy side in the US, according to Wood. Turquoise met with over 100 buy-side firms to understand what they wanted from a new service and it was critical to improve their workflow with as low a barrier to entry as possible.
Luminex clients trading in the U.S. will be able to use the same front-end to trade across Europe. Steve Miele, chief executive of LeveL Markets, told Markets Media that it is a long and expensive process to directly interact with the buy side as OMS integrations take a long time, but the new partnership is targeting a September launch.
“A differentiator for Luminex is the OMS integration and connectivity, and that we are nimble and can innovate,” added Miele. “Workflow efficiency is very important in getting new products to market because the barrier to entry is fairly low.”
Miele continued that after merging LeveL and Luminex, the firm’s goal was to expand into other regions but launching a new venue in Europe involves a lot of work. LeveL Markets was created through the 2022 merger of the entities that operated the LeveL ATS, a US equity dark pool trading venue for the sell-side, and Luminex ATS, a block trading venue built for the buy side.
Steve Miele, LeveL Markets
“Turquoise is the leading pan-European solution, so we approached them about a collaboration to bring a new block trading offering about two years ago,” Miele added. “Sourcing liquidity in Europe is more challenging so we are trying to remove the friction for sourcing block liquidity.”
Wood also highlighted that the heritage of Turquoise is that it was built for the sell side, while Luminex’s heritage is that it was built for the buy side, so they complement each other. He said: “We can take the best of both services and work together to bring them to Europe or the US, which becomes really interesting.”
Manual Conditional order type
The Manual Conditional order type is designed to allow different sources of liquidity to interact, whether manual to manual or manual to electronic. It facilitates that interaction, and brings together differentiated block liquidity from Turquoise with differentiated buy-side liquidity from Luminex, said Wood. The new order type takes what Turquoise has built in the block discovery space and gives the buy side more choice in terms of how they interact with conditional orders.
“We will have buy side to buy side, or manual to manual, or manual to electronic and vice versa,” said Wood. “We believe we are going to offer unique liquidity to the market.”
He argued that Turquoise’s Block Discovery is very patient, so lends itself well to some manual interactions, and combines well with a more fast-moving dark book, so users can achieve a really good outcome and lower market impact.
LeveL ATS is used to innovation as Miele highlighted that trajectory crossing, a trading mechanism which allows participants to source and match liquidity at a forward benchmark price, was launched on the ATS. He said: “We could potentially see the trajectory cross in a partnership framework with Turquoise.
Miele continued that this partnership is the first big expansion in scaling Luminex. He added: “We are looking to expand across the globe, not only in equities but also into other asset classes.”
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