Introducing Apex CODA Fuse

Posted on: June 01, 2022

How Institutions Get Enhanced Liquidity Without Sacrificing Speed

The other day, Apex CODA Fuse launched. It was a big moment. This product is a culmination of my journey through the trading industry and represents the evolution of CODA Markets (an Apex Fintech Solutions company focused on alternative equity trading systems). But more than that, it’s the start of a new era for institutional investors. Apex CODA Fuse helps to end many of the intraday auction obstacles that have long been accepted by the industry as standard.

It Started with the Diminishing Returns on Speed

Speed has always defined our business since the days of ticker tape and the frenetic action in the pits. But today’s market is all about technology delivering ever smaller increments of latency reduction. Institutions spend countless hours and dollars to shave off time, right down to every extra microsecond. But ultimately, this focus on speed led to diminishing returns.

Industry advances in trading speed couldn’t outrun some fundamental institutional concerns. The industry was overloaded with conventional venues executing trades bilaterally and sequentially. On any timescale, information leakage poses significant risks. The industry still had to disguise trades and concentrate volume in auctions at the beginning and end of the day, exacerbating the “liquidity smile.” There had to be a better way and a new direction. The next major shift would need to go beyond simply speeding up an imperfect process— it would need to facilitate a different way of trading. Enter Apex CODA Fuse.

A Way Around One-at-a-Time Trading

Imagine an auction model that processes orders simultaneously and matches buyers and sellers at a mutually acceptable price. All of this helps institutional traders determine where the market is for the specific quantity they need to trade. Auctions can be executed instantaneously, fluidly, and continuously throughout the trading day. In a nutshell, that’s the market revolution introduced by Apex CODA Fuse.

A Focus on Trades and Not Workflow

What’s the good of enhanced liquidity if it has a huge opportunity cost to access? Not much. That’s why we took it a step further than before by making Apex CODA Fuse easy to use for almost any strategy, algo, or order type. Apex CODA Fuse helps traders realize the benefits of the auction model as part of their existing low-touch workflows. We know that conditional orders have become key among institutional brokers, but the support for aggregated conditional orders to trade simultaneously in a single print is brand new with Apex CODA Fuse. The Apex CODA Fuse multilateral matching engine is built to improve overall liquidity availability and execution quality by allowing multiple orders to participate on both sides of the same trade. And that’s a win-win-win.

Adding Efficiency to Conditional Orders

Ultimately, the more efficient the market microstructure, the more opportunity to reduce transaction costs, increase access to liquidity, and deliver better trading performance overall. Through the tireless work of our team and our cutting-edge technology, Apex CODA Fuse brings us closer to this reality. The fact is that the institutional community has been underserved by the tech advances that have revolutionized the retail space. And face it, retail traders simply don’t have the same concerns around information leakage. But for institutional brokers, the need to reduce this leakage is at odds with the need to approach multiple venues with their orders. By aggregating multiple counterparties into a single trade opportunity, Apex CODA Fuse enables these players to run a complete, competitive process in a secure manner.

A Speed-Obsessed Industry Can Now Race Without the Bottleneck of Single File Queues

My team and I are excited about Apex CODA Fuse — not just because of the benefits — but also how it reflects our Apex Fintech Solutions company values and how we view the markets. While today’s markets have never been more robust, the emphasis on speed has created incentives among traders. We believe the market that works best is going to be the one that’s most inclusive. And that means helping to facilitate the meeting of buy and sell orders to discover a clearing price at a precise quantity and under precise conditions.

By being as inclusive as possible with the retail and institutional communities, we can get closer to an environment where all players are empowered to take advantage of the industry’s tech evolution. Apex CODA Fuse is an important step toward fostering this environment, enabling increased access to diverse liquidity at a lower cost, and potentially ushering in the next seismic increase in the effectiveness of the marketplace. Read our Apex CODA Fuse press release here for even more details on this product. Contact us to discuss how Apex CODA Fuse can help you go to the next level.

Don Ross

Head of Institutional & Trading at Apex Fintech Solutions

This blog reflects the opinions of the author.

Important disclosure

Securities products and services are offered by Apex Clearing Corporation. Cryptocurrency products and services are offered by Apex Crypto LLC. The information contained herein is provided for informational purposes only. This information is designed to assist you with your business and is not representative of issues or risks generally or specifically known within the financial industry or any business in particular. Apex Fintech Solutions is not engaged in the business of rendering consulting, legal, accounting or compliance advice. If you require such services, a professional in such matters should be contacted. This information may not be reproduced or distributed, in whole or in part, without the express prior written consent of Apex Fintech Solutions. Further, the information herein is subject to change without notice.