Squawker prepares to offer social networking-style trading – Banking Technology

A new trading venue called Squawker is planning to become the world’s first trading venue based on social networking technology.

Designed for sell-side firms as a platform to help investors who want to trade large blocks of stock, the new platform will enable investment banks, market makers, agency brokers and proprietary trading firms to trade anonymously within a single transaction, once it goes live in Q1 2013.

Normally, trading equities in large blocks is difficult in developed markets, because market fragmentation, small tick sizes and the presence of high levels of high-frequency trading activity all mean that a large order would create too much market impact and be too easily exploited by rivals to be viable on most lit exchanges. The growth of dark trading venues such as block crossing networking Liquidnet and many others across the US, Europe and Asia in recent years can be largely attributed to market participants’ desire to avoid the market impact generated by large trades…