Almost all of these competing trading venues are electronic limit order books
, in which a trader can post a limit order, which is its firm commitment until cancelled, to buy or sell up to a specified number of shares at a quoted price.
Designed to maximize access to liquidity and reduce limit fragmentation for all market participants, CreditLink supports request-for-quote and request-for-streaming trading using a centralized limit check (Ping model) and also gives FCMs and their clients the ability to distribute limits directly to specific trading venues or CCPs to minimize latency (Push model), which is important for buyside firms, executing brokers, interdealer brokers, market makers and exchanges using central limit order books
Highfrequency trading is also prominent on US central limit order books
, accounting for an estimated 60-70% of activity
Using data on the limit order books
and specialists' quotes, Goldstein and Kavajecz examine liquidity provision by limit order traders and floor members during these extreme market movements.