The mounting importance of the auction process can be seen in traders’ increased use of strategies that can only play out during auctions. The use of these special strategies has increased from 5 percent of portfolio trading flow in the first quarter of 2015 to 14 percent in the same period one year later, according to the Greenwich Associates report.
Bats isn’t the only exchange making adjustments to lure additional volume. NYSE, owned by Intercontinental Exchange Inc., made a different move earlier this year, allowing Nasdaq-listed stocks to trade on all of its markets and its floor for the first time.
At the time, the exchange touted the move as an advantage for institutional investors who wish to trade using brokers on the floor, who have special order types at their disposal for use during auctions.
This article was provided by Bloomberg News.