Pure Trading sticks to third, finds more customers

2009-12-29 17:48 ET - Street Wire

by Stockwatch Business Reporter

Pure Trading continued as Canada's third most active alternative trading system during the shortened week ended at 10 a.m. Pacific Time on Dec. 24, 2009. The most active ATS was Alpha Trading Systems with an average of 122.53 million shares per day, followed by Chi-X Canada with 20.08 million shares per day. Pure Trading had a daily average of 9.66 million shares. Combining their volumes, the ATSs accounted for 23.2 per cent of the total Canadian volume which includes all listings on the Toronto Stock Exchange, the TSX Venture Exchange and the Canadian National Stock Exchange.

CNSX Markets Inc., owner of Pure Trading and the CNSX, has been signing up customers. On Dec. 23, 2009, it struck a deal with Laurentian Bank Discount Brokerage, the on-line investment branch of the Quebec-based bank. The deal enables investors who use Laurentian's on-line service to trade securities on the CNSX or Pure Trading. The following day, Christmas Eve, the CNSX approved Toronto brokerage firm Jennings Capital Inc. as a CNSX dealer. Jennings can also now trade on the CNSX and Pure Trading.

It is inevitable, given the rising use of high-frequency trading, that all competitive brokerages will sign up with the ATSs, according to Laurie Berke of the Tabb Group, a research organization. She says the high-frequency firms that already have direct data feeds from the TMX Group and each ATS in Canada are able to take advantage of arbitrage opportunities available because of differences in the speed of market data coming from the TMX Group and the ATSs. Tal Cohen, chief executive officer of Chi-X Canada, agrees. Earlier this month he told Securities Industry News, "With multiple markets, people start to pay attention to how they route their orders, people pay attention to how they can connect to the marketplace and they also start to pay attention to the trading strategies they employ in a multiple market environment." Mr. Cohen added, "Part of what we've been saying all along and what the other competitors have been saying is we think we can grow, we think we can engage the investors in the U.S., Europe and Asia to trade more readily in Canada if we give them options in terms of market models and lower the cost of trading."