From Wikipedia, the free encyclopedia
A
crossing network
is an
alternative trading system
(ATS) that matches buy and sell orders electronically for execution without first routing the order to an exchange or other public displayed market such as an
electronic communication network
(ECN). Such crossing networks are a type of
dark pool
that employ computerized systems to match buyers and sellers of large blocks of shares without using a
stock exchange
.
[1]
The advantage of the crossing network is the ability to execute a large
block order
without impacting the public quote and avoidance of
market impact
(i.e., the movements in a stock's price due to an investor's indication of interest).
[2]
These networks are often owned and operated by
broker-dealers
to match buyers and sellers of large blocks of shares. Depending on the particular broker-dealer's system and the type of securities traded (e.g., exchange-listed or OTC securities), these crosses could occur at various times during the day, or after the close of trading, and could be priced at the last sale price or some other objective price, such as the midpoint between the bid and offer or the
volume weighted average price
(VWAP).
[2]
Crossing networks tend to be used for highly liquid stocks and offer
money managers
the advantages of very low commissions, anonymity for the buying or selling, and avoidance of market impact. As of 2012
[update]
, examples of crossing networks included
Liquidnet
,
Pipeline Trading Systems
,
ITG POSIT
and
Goldman Sachs' SIGMA X
.
[3]
References
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edit
]