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Crossing Network

A crossing network is an electronic trading platform that matches buy and sell orders for securities without publicly displaying the prices or volumes of the trades. This type of trading system allows large institutional investors to execute trades anonymously, reducing the market impact of large orders. Crossing networks are typically used by institutions looking to minimize price movements caused by the disclosure of their trading intentions.

Example

A pension fund wants to sell a large block of shares without moving the stock price. It uses a crossing network to match its sell order with a buyer, executing the trade anonymously.

Key points

• Crossing networks anonymously match buy and sell orders without publicly displaying price or volume.

• Used by institutional investors to minimize the market impact of large trades.

• Crossing networks provide privacy and help reduce price slippage.

Quick Answers to Curious Questions

They use crossing networks to execute large trades anonymously, reducing the market impact and price movements that might occur if the trade were public.

Crossing networks do not publicly display prices or trade volumes, offering more anonymity compared to traditional exchanges.

It allows for anonymous trading of large blocks of securities, minimizing price slippage and protecting the investor’s trading intentions.