“It used to be the business model for the large dealer was to crush the small dealer,” said David Light, CrossRate’s co-founder and the former head of rates at RBC Capital Markets. For dealers, it’s now a “symbiotic one.”
And to deter what Light calls “toxic flow” of predatory traders, CrossRate plans to offer rebates to firms that don’t engage in those practices.
LiquidityEdge’s Rutter isn’t worried about the competition. Instead, he says the perceived problems associated with certain high-speed strategies have become so pervasive that everyone is looking at alternatives to the status quo.
It’s “one of the reasons we exist,” he said.
This article was provided by Bloomberg News.