BIDS Trading, L.P. was formed by a consortium of banks that believed that there was a need to create a highly liquid, low-cost, industry sponsored, service for block traders. BIDS Trading is designed to foster competition and to resolve existing inefficiencies that have impeded trading blocks of shares.
The BIDS Trading ATS is a block crossing network that is designed to maximize the ability to execute large orders. The primary goal of BIDS Trading is to build an open network of buy-side and sell-side firms.
BIDS Trading does not publish side, size, or price information. Users of the BIDS Trading ATS are not aware of the identity of their counterparties and no confidential information about their orders is exposed unless there is a bona fide opportunity to trade.
BIDS Trading Is Open
The BIDS Trading ATS is designed to level the playing field for block trading and to treat all firms the same. In addition to allowing open access to both to sell-side firms and their sponsored buy-side clients, the BIDS Trading ATS is open to algorithms, hedge funds and program traders.
Traders can submit orders directly to the BIDS Trading ATS from a buy-side or sell-side Order Management System (OMS), through an Execution Management System (EMS), through an algorithmic engine, or through the BIDS Trading ATS web interface.
Regardless of the route selected by the participant, the trader maintains control of the transaction – with the assurance that order details always remain confidential.
BIDS Trading Is Flexible
The BIDS Trading ATS provides customizable tools to empower end-users to successfully negotiate trades. Information disclosure and minimum block size is controlled by the trader and users can choose who to trade with based on past trading behavior.
The BIDS Trading ATS provides users with the following trading tools:
Multiple Ways to Trade
The BIDS Trading ATS supports both Auto-matching and Negotiations as methods for trading:
Auto-match – Auto-matching allows traders to automatically execute their order within the NBBO.
Negotiate – Negotiating allows traders to interact with orders when an auto-match is not available.
Flexible Order Types
In addition to Limit orders, Midpoint Pegged Orders, and Midpoint Pegged Orders with a Limit, BIDS Trading ATSsupports the following order types:
Firm orders – Firm orders allow traders to access liquidity within the BIDS Trading ATS order book for immediate execution.
Conditional orders – Conditional orders allow traders to search for liquidity in multiple venues. If volume becomes available within the BIDS Trading ATS, the trader’s order will automatically be invited to firm up to trade or negotiate, allowing the trader to cancel duplicate orders in other venues so the same order is not filled more than once.
Order Protection
Behavioral Profiling – BIDS Trading Scorecards™ and BIDS Trading Filters™ give traders additional control over their trades, letting them decide to whom they want to disclose information. BIDS Trading Scorecards™ identify potential counterparties based on their past trading behavior in four key areas. While traders never see their counterparty’s scores, they can use BIDS Trading Filters™ to filter screen traders with certain undesirable behavior.
Minimum Block Size – Each trader determines the size of a block, on an order-by-order basis. No counterparty with a size less than the specified minimum receives any information about the order.
Price Discretion – Traders can set price discretion so that the BIDS Trading ATS will invite an order that does not cross, but is within the trader’s price discretion, to negotiate. Since this is a situation in which information will be disclosed, the BIDS Trading ATS ensures that the disclosure is desirable to both parties – each trader’s BIDS Trading Scorecard™ is compared to the filter of the other trader before any information is revealed.
BIDS Trading Is A Utility Model
The BIDS Trading model emphasizes efficiency and quality of service through innovative technology.
BIDS Trading is accessible to all qualifying broker-dealers and their institutional clients, subject to basic credit and regulatory considerations. Use of the BIDS Trading ATS as a block trading service is not exclusive or subject to volume commitments and each participant may continue to use any ATS, ECN or exchange service that supports the trading needs of its customer base.