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News October 4, 2004 Issue

What’s in the Pipeline?

If you like Liquidnet and Posit, youíre going to love Pipeline. At least thatís what the founders of Pipeline, a new alternative trading system that went live last month, are hoping.

Pipeline offers continuous trade matching (rather than at periodic intervals) and is open to the buy-side, sell-side, as well as hedge funds. Trading, however, is limited to blocks of 25,000 or 100,000 shares. "A large minimum size eliminates the predatory trading activity that typically happens when institutional orders are worked on ECNs," says Pipeline.

If an adviser, in providing 2 percent fills across eligible accounts, comes up with order of, say, 115,000 shares, Pipeline, a registered broker-dealer, can facilitate the trading the "odd lot" of 15,000 shares after the "bulk" trade of 100,000 shares has been matched.