Bank of America Merrill Lynch today unveiled Instinct Natural™, an enhancement to its alternative trading system (ATS) Instinct X, aimed at increasing opportunities to execute block trades while minimizing market impact.
“We want to make it easier for our clients to find liquidity so we’ve built a central platform where natural flow can interact,” said Jason D. Crosby, global head of portfolio sales and head of Americas institutional execution services sales. “With Instinct Natural, clients can tap the vast, uncorrelated, natural order flow that comes through our firm. We expect this will quickly become the place to go for size and price improvement.”
Instinct Natural allows the client the opportunity to leverage the liquidity from institutional and private clients trading with BofA Merrill’s high-touch, electronic, ETF and equity derivatives desks. Instinct Natural works by having the buyside trader rest conditional placements in Instinct X and await an invitation to firm up. BofA Merrill believes that as clients become more willing to rest longer in Instinct Natural, they’ll find natural crosses with price and size improvement and minimal market impact.
Clients will have several ways to access Instinct Natural by the use of conditional placements. This can be accomplished via BofA Merrill’s algorithms, directly via FIX or they will be able to instruct their cash trader to direct conditional placements to the platform. Instinct Natural will not be linking into client order management systems and is designed to give clients total control of their interaction with the platform.
BofA Merrill has been able to win market share in the last year from competitors. As of January 29, 2013, BofA Merrill is No. 1 in U.S. Composite volume according to Bloomberg with 12.95 percent market share, up from 11.7 percent one year ago. By connecting clients with the firm’s vast liquidity, Instinct Natural is an ideal platform for sales traders and clients to collaborate on larger trading opportunities. BofA Merrill believes that if clients’ broader goals are known to their sales trader, they’ll be able to find greater opportunities based on the liquidity available from across BofA Merrill’s trading floor.