Counting Chi-X

There has been a lot of comment on the data on market shares in European equity trading in January (for example, here), which appear to show Chi-X overtaking the London Stock Exchange to have the second highest turnover (by value) after Euronext.

Of course, the answer you get depends on the question you ask and there were (at least) two oddities in the question to which this is the answer. Most importantly, the data relate only to trading on order books and thus exclude the very considerable quantity of trading over the counter, away from order books. Second, the data treat the LSE and Borsa Italiana as separate entities.

A different picture emerges if one asks for a breakdown of trading by exchange group, taking on-exchange and OTC business together. Now it appears that the largest venue is Markit BOAT – an OTC reporting mechanism. And when the OTC business of the major exchanges is included then they still exceed Chi-X.

Shares in European equity turnover (by value)

Source: Thomson Reuters data

This is not to detract from the achievement of Chi-X, which has come from nowhere in the space of two years and it is remarkable that, compared with a few years ago, it is now Chi-X that is considered as the main challenger for the LSE, rather than Deutsche Borse. But one good story should not obscure others, such as the size of the OTC market and how this affects the shares of different players.

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