The New Electronic Trading Regime of Dark Books, Mashups and Algorithmic Trading

The ascendancy of algorithmic trading has also been at least in-part responsible for an important driver for the rapid expansion of the alternative transaction systems (ATSs)—including the so-called Dark Books. Arguably, the use of algorithmic trading is also accelerating the adoption of transaction cost research products such as pre- and post- trade analytics to predict and validate performance of trading—but especially algorithmic trading. That the US Equities trading is undergoing a transformation led by trading algorithms, Dark Books and transaction cost analytics is not surprising; what is surprising is that market participants are responding to the change by combining algorithms, dark liquidity venues and analytics in new ways and investors are benefiting.