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Nomura-backed stock exchange Chi-X has saved Australian traders $215 million a year since launching in October 2011 by reducing bid/ask spreads in the equity market, researchers have found.
The ASX has had a monopoly on Australian share trading prior to Chi-X, and cut its fees to the tune of $7.8 million in response to the new exchange, research released today by Capital Markets CRC reveals.
Researchers found that as more trading took place on Chi-X, quoted bid/ask spreads narrowed.
According to Capital Markets CRC estimates, spreads reduced by between 0.686 and 2.61 bps as a result of Chi-X taking 10% market share, which saved traders $65-$248 million in 2012 alone.
Chi-X accounted for about 11% of market share as of December last year, but only 6% of on-market volume.
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