BST Awards 2020: Best buy-side execution venue—Dash Financial

Change is slow—until it isn’t.

DashFinancial is only half the age of the only two companies to win this category since 2008. Nineteen-year-old Liquidnet dominated for 10 years straight, and 20-year-old MarketAxess took the title the last two years. However, this year, 11-year-old Dash Financial is the buy side’s favorite execution venue, thanks to its alternative trading system, Dash ATS, which launched in January this year.

“In today’s options market, finding liquidity can be a challenge. With shrinking levels of posted liquidity, exchange fragmentation and a smaller dealer market, the need for an alternative liquidity venue has grown,” says Dash managing director Eugene Kearns. “The goal of the Dash ATS is to augment on-screen liquidity, reduce exchange fees, and seek price improvement opportunities. This is accomplished by aggregating a network of liquidity providers who are given the opportunity to respond with their quotes before an order is routed to an exchange.”

The Dash ATS is an off-exchange liquidity venue for US-listed options that differs from equities ATSs as it’s driven by requested quotes where other market participants are unable to see flow or order size.

Trades are matched through the request for quote (RFQ) process, in which market makers and liquidity providers can respond with their quotes before the order is routed to an exchange. If the RFQ improves the NBBO in price and/or size, the ATS will automatically pair the interest before routing to an exchange.

Today, Dash executes approximately 15% of OCC volume, with the DASH ATS being an integral part of the firm’s liquidity strategy.