In this approach it is believed that there is a relationship between exchange rate returns and the market praticipants'
order flow.
Noting an absence of liquidity at times of high volatility from firms that internalise or preference
order flow, the summary report into the flash crash by the joint Commodity Futures Trading Commission and Securities and Exchange (SEC) advisory committee called on the SEC to consider requiring internalising broker-dealers to execute "some material proportion of their
order flow during volatile market periods".
Order flow analysis has proved to be helpful in understanding changes in the exchange rate in the short term and the new statistics are well suited for this type of analysis.
By accelerating work and
order flow, management fosters increased revenues.
The practice is referred to as "payment for
order flow.
while competition for
order flow is coming not only from the other markets, but from the ECNs and the brokerage firms themselves.
These markets are expected to produce narrow spreads through competition among dealers for
order flow.
Direct Market Access and Options Algorithms Account for 66% of all
Order Flow in 2011
Because the JavTrader/JavCentral connection offers the buy side instant FIX connectivity and more consolidated
order flow, broker/dealers quickly gain access to a greater pool of liquidity.
This isn't expected to change in the near term because many investment managers are and will remain reluctant to trade with the retail flow that represents most current ECN
order flow.
MS POOL is a continuous dark liquidity pool that enhances crossing and price improvement opportunities for its clients by combining many sources of
order flow into one aggregated pool of liquidity.
The new crossing pool will enable client orders to interact with UBS's US equity
order flow - including client agency flow and UBS trading desks.
