Buy-side book-building platform Appital has moved to expand its pre-trade price discovery capabilities to allow for greater natural liquidity amongst its buy-side clients.
Named Price Discovery in Appital Insights, the tool allows buy-side users to invite select feedback on live orders in order gain insights on potential pricing and volume before committing an order to a bookbuild or before launching a bookbuild themselves.
Through the expanded workflow, Appital claims its clients can unlock latent liquidity. If sufficient demand is captured in price discovery following buy-side invitations for feedback, then the information flows anonymously back to the originator to launch a bookbuild. Liquidity is subsequently realised.
Buy-side traders retain control over how and when they interact with liquidity, said Appital, while portfolio managers can also respond to price discovery processes without generating an order in their EMS.
Appital said the new uncommitted order types during price discovery would “reduce bookbuild duration while increasing the likelihood of its success”.
“With Price Discovery in Appital Insights we are digitising yet another step in the high-touch trading mechanism while also minimising risk of information leakage and price erosion,” said Mark Badyra, chief executive at Appital.
“This aligns with our strategy to deliver unique workflows to trading and investment teams. I believe that illiquidity issues can be solved globally by bringing technological innovation into the equity market and providing distinctive functionality to the buy-side. With Price Discovery in Appital Insights, firms are able to generate orders that would otherwise not exist, resulting in increased deal flows and liquidity events.”
Appital officially launched Appital Insights in September last year. The initiative allows buy-side institutions to assess how viable the execution of larger average daily volume (ADV) orders will be without the risk of information leakage or price erosion.
Traders and portfolio managers can also access exposure to liquidity events in relevant equities meeting their minimum ADC or pricing thresholds.