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From the Trading Post: Liquid Markets

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Matt Cushman
Managing Director of Quantitative Strategies, Knight Equity Markets LP

Among the most active trading firms on the NYSE are Supplemental Liquidity Providers (SLPs), which now represent nearly 10 percent of the Exchange’s volume. The SLP program, launched in 2008, has six participating trading firms, including Knight Equity Markets LP, and will expand in coming months.

Complementing the liquidity of Designated Market Makers, SLPs are electronic, high-volume members that deploy their own capital using proprietary trading models and have incentives to add liquidity. They must quote at the National Best Bid and Offer, or NBBO, at least 5 percent of the time. “The program has helped bring new players to the NYSE, tightened spreads and provided more liquidity for investors. This has led to a better environment 
for issuers to raise capital,” says Matt Cushman, managing director of quantitative strategies, Knight Equity Markets LP.