subject: Factors That Influenced The Growth Of Direct Edge [print this page] One of the leading stock exchange firms of today is Direct Edge. The growth story of Direct edge is mainly because of the innovative and inspiring technologies and methods that were employed by them. When compared to the other giants of the stock exchange, this firm took almost as little as only six years to reach where it has since its purchase and rebranding by the Knight Capital Group. Not until early 2010 did this firm get the approval from SEC to operate as a national stock exchange. As soon as the approval was given it began operating EDGA and EDGX, its ECN platforms as newly established stock exchanges. This move to become a complete stock exchange led to the reduction in the exchanges cost to a significant amount like the ones that were acquired in the clearing. It also paved way for more amounts of market fees from market participants to the firm directly.
Innovation in the way Directedge handled the stock exchanges was what that got the firm into the league of the big five which includes the NYSE, Euronext, NASDAQ OMX and the private firm BATS Exchange. The main feature that they forged to succeed was the bifurcated market structure. This way they had two separate platforms rather than one. This helped them largely in assisting different zones of customers.
Another feature that made this company stand out from the rest was their integration of dark liquidity into the market. They became the first stock exchange firm to provide such a facility. The amalgamation of dark and displayed liquidity added to their growth. The exchange operated on a free/free model which permits to either supply or take liquidity. In this regard, the firm introduced the Enhanced Liquidity Provider (ELP) which provides the subscribers with access to various sources of displayed and dark liquidity. Another feature that is employed is in the pricing division. The firm employs the classic rebate model of pricing. How it works is that the liquidity takers are levied with a fee and the liquidity providers are offered with rebates. Thus these are some of the factors that have brought this stock exchange firm to the position they are in now.
