AX Trading LLC, the new electronic trading community that allows institutional traders to connect and trade in a whole new way, today announced that it is expanding its trading hours from 8:00 AM ET until 5:00 PM ET.
AX allows traders to call their own auctions in any stock at any time. Over the course of the last several months AX has seen increases across all metrics – number of auctions, number of issues, and executed volume. With the expanded hours AX members will be able to call their own auctions in pre-market hours from 8:00-9:30 AM ET and also in post-market hours from 4:00-5:00 PM ET.
The move is in response to increased client demand for the ability to trade under a call auction as opposed to other off-hour trading vehicles. The AX price discovery feature is especially useful in pre- and post-market trading because the market quote tends to be even more volatile and unreliable in after hours than it is during the day. The AX call auction model is also effective for trading around “events” such as earning announcements that often occur in pre- and post-market hours.
The AX is different from every other crossing system is that it allows for true price discovery. Institutional investors submit limit orders into the auction and that auction may clear within the NBBO – at prices different from the midpoint price or even outside the NBBO. Most crossing systems simply match buyers and sellers at the midpoint of the NBBO.“
The AX is designed to help members find liquidity in tough-to-trade stocks and the reality is that just about all stocks are tough trade in pre and post market hours, even many large and midcap stocks,” said AX Trading CEO Kevin Callahan. “The AX allows institutional investors to trade where they want to trade rather than simply following the vagaries of a highly volatile and very thin market quote that is often driven by flickering quotes from high frequency traders.”