PDQ

PDQ is an algorithm hosting facility and a response mechanism for order flow. This facility brings trading interest from Algorithmic Firms and matches it with Institutional and Customer Order Flow using a Patented, Leakage proof process.

The technology of PDQ will consist of four basic elements: links to markets and market data, the PDQ processing center, Electronic Brokers and Event Boards. These elements will combine to allow algorithmic models which are operated and controlled by Liquidity Providers (LP’s), to act locally in the marketplace thereby creating a “crowd” of algorithmic liquidity in the electronic market.

The PDQ process consists of the PDQ processing center receiving an order, which is on its way to an electronic venue, and then generating a request for trade (“RFT”) to interested electronic brokers. The electronic brokers reference the Event Board value for the security, and when appropriate respond with a contra side “SPAWNED” order. This process takes less than 20ms and will be anonymous and remain confidential to all parties.

PDQ has two types of customer: Liquidity Seekers (LS) and Liquidity Providers (LP). LPs can use PDQ to respond to and interact with live order flow, thereby eliminating their risk of adverse selection and allowing them to make markets of larger size. LSs sending orders to PDQ will be given the opportunity to discover contra liquidity and potential price improvement generated by LP proprietary algorithms hosted within the PDQ facility. Hosting the algorithms within the PDQ facility allows PDQ to contain all order information and thus maintain full confidentiality and completely eliminate any gaming risk for Liquidity Seekers.

During the basic process a liquidity seeking order arrives at PDQ where it is paused for 20 milliseconds (ms) and a RFT notification is sent to all liquidity provider algorithms simultaneously and anonymously. Any contra liquidity generated by the algorithms within 20ms will be paired on a “first-to-respond first-to-pair” basis. PDQ will check the NBBO and the trades will then be reported to a Trade Reporting Facility (TRF). Residual liquidity is routed out or cancelled according the order type.