Darwinex will offer direct market access (DMA) to single stocks from May 10th, 2018. We will start with contracts for differences (CFDs) on 30 US stocks -the DJIA constituents- on the MT5 platform.
Once we have road-tested operations, we will:
- Expand the universe of US stocks
- Add European stocks
Our target is to eventually include the 20% of reference stocks that account for 80% of volume.
The rest of this blog entry describes:
- The price feed
- The venues you trade at
- Our strategy regarding DARWINs on single stocks
Further, we’ll be happy to take any outstanding questions in a dedicated webinar on May 24th, 6PM London Time – it’d be great if you attend!
The price you see
Streaming a high quality price-feed has required a trade-off between 3 goals:
- Reporting the true market price for the stock at hand, whilst
- Meeting exchange data-distribution requirements, at a cost
- We could subsidise for users
The best compromise on the above was CBOE’s offering. We’ll stream their Top of Book feed at no charge to customers:
—> US: the CBOE BZX live Top of Book price,
—> Europe: the live CBOE Europe stream,
CBOE’s feeds are the most representative alternative to primary markets.
The fill you get
We broker your Direct Market Access via our Prime Broker in London, and its clearing agents.
The brokerage commission you pay us buys you the best fill:
- In the open market, including both CBOE and every alternative,
- Via systematic internalisers under the MifId regime in Europe
That is, the price you:
- See is the price available from the relevant CBOE venue (depending on whether you trade US or European stocks)
- Get is the best market price available from any regulated alternative, including CBOE US or Europe, but not limited to it
Equity based DARWINs?
Managing risk for underlyings not trading 24/5 required changes to the Risk Manager. This is because the software must protect investors in the event of overnight price gaps.
We’ve developed a new Risk Manager, alongside a new testing environment. This will keep the more than USD 50MM AuM in the Platform safe, but also pave the way for more asset classes in the future (futures, here we come!).
What this also means is that equity based DARWINs are well on their way. Our plan is to release them as soon as we’ve live-tested the new operational processes for stocks… stay tuned!
We will provide more background on all the above in a webinar on May 24th, 6PM London Time. Please send any questions in advance in the comments to this blog entry, and we’ll be glad to cover them!