Tuesday, January 11, 2011

new stock trading venue Credit Suisse

new stock trading venue Credit Suisse : Credit Suisse plans to launch a new stock trading market that aims to protect long-term investors from predatory trading practices. The new electronic communication network, called Light Pool, will block orders from opportunistic traders when they cross certain thresholds, said Dmitri Galinov, director of advanced execution services at Credit Suisse.

A formula will track how investors fare in the stock market directly after executing trades in Light Pool and restrict access to traders constantly beating out the rest of the market.

In a coin flip, if someone beats you 99 out of 100 times, you ask yourself if everything is all right," Galinov said.

Credit Suisse's plans to launch the new stock market were first reported by Bloomberg.

In response to last year's May 6 "flash crash," when the stock market abruptly plunged, Credit Suisse will arm its market with measures to prevent future swoons.

Light Pool will send all orders through pre-trade risk checks and slow down clients whose algorithms seem to be malfunctioning, Galinov said. Credit Suisse will also slow down any clients sending too many quotes around a single stock, a practice some market watchers say can be used to manipulate stock prices.

Light Pool is currently operating in beta mode with three clients sending orders in 12 stocks. Credit Suisse plans to fully
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