Blocks vs Streams – Part 2

A few weeks ago we blogged about how block trades have been melting into streams. Buy side, and sell side institutions have already, for the most part, incorporated the new paradigm into their business models.  This week we get news that another exchange has figured it out.  The Deutsche Börse made an announcement that they are cutting the fees for small orders on their Xetra electronic trading platform.

Seeing an increasingly important portion of their revenue stream–that derived from small orders–end up in the hands of alternative trading venues, they took the fairly drastic step of altogether abolishing the €0.60 minimum fee for executed orders. Naysayers point out the €35m in “lost revenue” this will cause based on their current order-flow statistics, but we believe–clearly as does the Deutsche Börse–that this  will lead to dramatically increased streams of smaller orders.

So automate at will; break your blocks into streams, and be confident that the exchanges of the world are moving along with you.

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