You don't need (want?) to launch an exchange these days. What you do is launch a so called "dark pool", an opaque matching engine, to provide liquidity.
The point is the same: creating a dark pool (like an exchange) is more a market forces challenge, less a technical one.
I.e., you still have to attract a critical mass of traders to your platform, and once there, you have to figure out how to deal with anonymity, backing away, and gaming issues.
Even LiquidNet, despite its success in this niche, still has these problems.
The dark pools, or liquidity platforms, match orders up before they reach the exchange. Basically you have big orders sitting in the pool and waiting to match up with passing traffic. These orders are not publicly visible, so you get less price transparency than if all orders are matched through the exchange.
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You don't need (want?) to launch an exchange these days. What you do is launch a so called "dark pool", an opaque matching engine, to provide liquidity.
Then there are ECNs like http://www.batstrading.com/. See http://en.wikipedia.org/wiki/Electronic_communication_networ... and google for Island, Instinet or BATS.
The point is the same: creating a dark pool (like an exchange) is more a market forces challenge, less a technical one.
I.e., you still have to attract a critical mass of traders to your platform, and once there, you have to figure out how to deal with anonymity, backing away, and gaming issues.
Even LiquidNet, despite its success in this niche, still has these problems.
I voted you up even though I don't understand what you are talking about. But it sounds interesting...
The dark pools, or liquidity platforms, match orders up before they reach the exchange. Basically you have big orders sitting in the pool and waiting to match up with passing traffic. These orders are not publicly visible, so you get less price transparency than if all orders are matched through the exchange.