Goldman Sachs Electronic Trading has expanded its global crossing capabilities with the launch of Sigma X in Hong Kong.
"The growth potential of Hong Kong's market remains significant and we think alternative pools of liquidity will play an important role in its development going forward," said Gene Reilly, managing director and head of trading & execution for Goldman Sachs in Asia.
"Sigma X is an integral part of the global GSET strategy and this launch complements the liquidity aggregation efforts we have already made in the US, Europe and other parts of Asia," he said.
Goldman Sachs' Sigma X is comprised of a host of liquidity participants, including hedge funds, institutions, and broker dealers, as well as franchise flow from Goldman Sachs' trading desks. Sigma X is the largest non-displayed liquidity pool in the US by equity shares traded daily according to Tabb Group, having grown its average daily volume 10-fold in the last two years, and claims to trade over 300 million shares per day. The bank believes this makes Sigma X the sixth largest US market centre by share volume behind exchanges such as the NYSE, Arca, Nasdaq, Edge and Bats.
Clients should be able to access Sigma X Hong Kong through Goldman Sachs' REDIPlus Execution Management System, through third-party trading systems or via any system that supports FIX Protocol.
"Sigma X requires no technology build on the part of the customer, regardless of which system they use," said Shuya Kekke, managing director and head of Asian GSET. "By opting into Sigma X, a customer's order can potentially interact with the broad and deep sources of liquidity within Goldman Sachs, including the single stock and portfolio trading franchise flow, in addition to the diverse, self-directed GSET client flows," he added.
Sigma X Hong Kong is a fully licensed alternative trading system, and should allow trading for stocks listed on the Hong Kong Stock Exchange. "Our global experience in alternative liquidity pools, our diverse range of clients and our continued focus on maintaining a high quality pool of non-displayed liquidity means Sigma X will deliver substantial value to customers," he said.
"Customers benefit from the potential price improvement gained by executing orders at prices inside the primary exchanges' best bid/offer. Sigma X is completely anonymous, serving investor requirements that indications of interest are not published internally or externally," he concluded.