The Vienna Stock Exchange is expanding the functionality of the "Xetra® T7" trading system and will enable midpoint trading from Monday, 9 December. Stocks can be traded on the Vienna Stock Exchange at a midpoint price between the best bid and ask limit. Midpoint orders are collected in a separate midpoint order book and executed as soon as supply and demand meet at this midpoint price. In addition, so-called "midpoint sweep orders" offer the possibility to first check for execution in the midpoint order book and – if not fully feasible – to immediately transfer them to the regular order book.
"By introducing midpoint trading, we are responding to increased demand and strengthening our core expertise in equities trading. The expanded service offers trading participants added value when pursuing their trading strategies at the most liquid trading venue for Austrian equities," explains Christoph Boschan, CEO of the Wiener Börse.
Compared to trading venues that have already offered midpoint trading in Austrian equities, the Vienna Stock Exchange references its own order book, thereby significantly reducing the latency in data transmission and in the transfer of midpoint sweep orders to the regular order book. Trading via the midpoint order book allows larger orders to be executed without disclosing the discrete trading interest. As a result, price fluctuations due to increased supply or increased demand can be avoided. In addition, the implicit trading costs are reduced, as execution of the order is at the midpoint price and not at the opposite limits.
