What is Direct Edge?
Direct Edge offers the next generation of displayed markets. With U.S. cash equities volume routinely exceeding 1 billion shares per day, Direct Edge uses multiple ECN and exchange platforms and unique order types to match complementary forms of liquidity based on sensitivity to transaction cost, fill rate, and fill speed, while maintaining high execution quality and low latencies. Our innovative business model creates opportunities for the trading community unlike any other market center. This is what the future of trading looks like.
Everybody Needs Some EdgeSM. Do You Have Yours?
Is Direct Edge planning to convert to a stock exchange?
Yes, Direct Edge has submitted two exchange applications to the SEC. Direct Edge is already an exchange operator by virtue of its control of the ISE Stock Exchange, but these applications would allow Direct Edge to convert its EDGX and EDGA ECN platforms to exchanges.
Is Direct Edge launching new trading platforms? What is the timeline?
Yes, Direct Edge is planning to launch two new, state-of-the-art trading platforms to coincide with its launch of its two new exchanges. For more information on these next generation platforms, please click here.
Is Direct Edge an independent firm?
Yes. Direct Edge is an independent broker-dealer owned by a consortium that includes the International Securities Exchange (“ISE"), Knight Capital Group, Inc., Citadel Derivatives Group, The Goldman Sachs Group, and J.P. Morgan. Knight Capital Group was originally the sole owner of Direct Edge and the firm was spun off in the third quarter of 2007 when Citadel and Goldman made investments. With a 31.54% stake, the ISE is currently the largest shareholder of Direct Edge, followed by Knight, Citadel, and Goldman, each with 19.9%.
Along the way to becoming a fully independent company, Direct Edge has built:
- An independent management team, led by CEO William O'Brien
- Dedicated technology and operations personnel who are responsible for maintaining Direct Edge systems and subscriber service
- Its own Sales, Compliance, Marketing, Legal, and Finance functions.
Combined with its significant recent growth and growing brand presence in the marketplace, Direct Edge has evolved into an independent major market center.
What about the ISE Stock Exchange?
On December 23, 2008, Direct Edge completed a transaction with the International Securities Exchange (ISE) in which the ISE became a strategic investor in Direct Edge, and Direct Edge took operational control of the ISE Stock Exchange. For additional information about the ISE Stock Exchange, please click here.
What kind of firms can trade on Direct Edge?
Direct Edge offers its services to SRO registered broker-dealers in good standing located in the United States. Institutional clients seeking to access Direct Edge may do so through their broker-dealers. If you are interested in sponsored access, please call our Sales Team at 866-472-5267
Why should I trade with Direct Edge?
Direct Edge is a major market center. With average daily volumes over 1.5 billion shares (Q4, 2009), you need to have access to Direct Edge to trade successfully in today's marketplace. The greatest value, however, is in optimizing your usage of Direct Edge to get the most out of your order flow and capital. Whether your flow is cost-sensitive, speed-sensitive, fill-sensitive, or looking to interact with unsophisticated order flow, Direct Edge has a product that can help you achieve your trading objectives.
One distinction Direct Edge has is its dual platform model catering to a broad range of traders and market participants. Each platform has deep liquidity under its own MPID and pricing schedule. EDGX offers the classic rebate pricing model by providing liquidity suppliers with high rebates. EDGA offers an alternative approach, rebating liquidity takers. Click here for our fee schedule.
Among our innovative products and services is our Enhanced Liquidity Provider (“ELP”) Program. It can offer you the opportunity for price and size improvement on your orders.
What is the ELP Program and how can it get me improved price and size?
Direct Edge’s pioneering ELP Program offers subscribers integrated access to multiple sources of displayed and dark liquidity. Historically, traders had to seek executions in either the displayed market or a single “dark pool.” Direct Edge was the first displayed market center to offer a comprehensive solution. By facilitating dark liquidity participation in its market, and giving subscribers access to a vast network of non-traditional liquidity, the ELP Program improves the Direct Edge trading environment by increasing a subscriber’s opportunity for price and size improvement and lowering potential market impact.
Direct Edge launched the ELP Program in the spring of 2006, years ahead of its competition, and now routinely executes ELP volume of over 100 million shares per day (Q3, 2009). The ELP Program has helped Direct Edge establish itself as a recognized leader and innovator in offering next-generation trading solutions.
Click here for details on the ELP Program works and how you can become an ELP.
Who uses EDGX and who uses EDGA?
While any subscriber can use either platform, depending upon the order, there are certain kinds of firms that use one platform over the other because of the kind of trading they do. Here is the kind of order flow each platform tends to attract:
EDGX
- Passive black boxes
- Retail limit orders
- Agency Flow
- Agency Algo Flow
EDGA
- Pro-active black boxes
- Retail Market Orders
- Stat Arb Flow
- Active Agency Algo Flow
How do I become a client of Direct Edge?
To start the process of becoming a Direct Edge client, please complete the request for a client agreement. Once received, Sales will contact you with a copy of our subscriber application and to discuss setting up your account.
Forms and Requirements
The client agreement includes several forms and requirements:
- Your two (2) most recent annual audited financial statements;
- Your two (2) most recent FOCUS reports;
- A guarantee letter from your clearing firm if you have less than $1 million in net capital on your most recent FOCUS report;
- A completed subscriber application; and
- Completed clearing arrangement documentation
After we have received and approved the required documentation, Client Service will contact you within two business days to establish connectivity.
What stocks are traded on Direct Edge?
Direct Edge currently trades in all Tape A (NYSE-listed), Tape B (Arca/Amex listed), and Tape C (Nasdaq-listed) securities.
What types of orders does Direct Edge accept?
Direct Edge accepts Market, Limit, Immediate or Cancel, Reserve and Extended Hour Orders. These orders can be executed at the limit price or better. These orders are executed on a price-time priority.
How do I submit, cancel and receive orders and receive execution quality reports?
Before you can submit orders directly to Direct Edge ECN, you must become a client, which requires that you complete the required forms and provide the related attachments.
We have a number of choices for our clients to use to submit orders. Clients are able to submit orders to Direct Edge ECN through the Direct Edge Portalsm. The Direct Edge Portalsm is an application interface that allows clients to integrate their order management and trading systems via the FIX protocol with Direct Edge ECN. The Direct Edge Portalsm allows broker-dealer clients to establish FIX sessions with the Direct Edge ECN for the purposes of submitting or cancelling orders and receiving execution acknowledgement on executions in the Direct Edge ECN order book.
Where are my orders displayed?
Direct Edge displays its orders on the ISE Stock Exchange.
How can I view the Direct Edge order book?
SCRATCH allows broker-dealer clients to view the Direct Edge ECN full depth-of-book in a particular security.
SCRATCH is an optional service exclusively for Direct Edge ECN clients.
How much does it cost to trade with Direct Edge?
Please see our Fee Schedule
What is the plan to address contingency events?
Please see our Business Continuity Plan
What are the hours of operation?
Clients will be able to enter orders from 8:00 a.m. to 8:00 p.m. ET.
During this time, Client Service will be available to assist you in answering your inquiries and address any trading, technological or other matters.
How do I contact Direct Edge?
Client Service and Operations
For more information about client service and operations,
contact David D'Amico, 201.942.8225 or ddamico@directedge.com
Sales
For more information about sales,
contact our sales team, 866.472.5267 or directsales@directedge.com