NEW YORK (Reuters) -The off-exchange market for discreetly trading large blocks of stock could grow beyond the 40-plus venues that exist today as investors demand more choice, the chief executive of BIDS, the utility-like equity block-trading platform, said on Monday.
Many market participants and experts have said the sheer number of trading venues is unsustainable. But BIDS' Tim Mahoney predicted buyside traders could support an even larger number of venues if each venue was able to properly distinguish itself and offer traders a certain advantage.
"The more options you have, the better the results would be (for traders)," Mahoney said.
"It might be 40 venues, it might be 60, and yes, it could be 10. But as consumers, we have become used to having a lot of options. We want more choices, not less."
Mahoney, a former buyside trader, said the more ways investors have to execute orders, the more likely they are to boost their performance and enable them to keep transaction costs low.
"You have seen a collapse in transaction costs in the last several years," he said.
BIDS is sponsored by a consortium of Wall Street firms and the New York Stock Exchange. The key for BIDS and other venues, Mahoney said, was enabling investors to customize the tools they use to trade.
"It's like with a home page, where people want to determine what information they want to look at, in what order they want to look at it. It's a very 21st century thing," he said.
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