In our May 2024 analysis of end-of-day trading, we highlighted an emerging trend: IEX was gaining market share in the final minutes of the trading day, when more volume is trading than at any other time aside from the auctions.
Two years later, that trend has continued. Today, IEX ranks #3 in market share during the final 10 minutes of the trading day, handling 10% of exchange volume in single stocks priced $1 and above.
While IEX’s total market share is currently around 4%, that number also includes sub-dollar names, ETFs, off-exchange retail flow, and extended-hours trading. But for institutional traders, that lens isn’t always useful. In this more focused view — or what we call Institutional Market Share — IEX stands out as a top-tier venue, and even more so in the final minutes of the day.
Nasdaq and NYSE, the two primary listing venues for single stocks, historically have the largest market share in the closing minutes as participants anticipate orders rolling over into closing auctions. Additionally, off-exchange trading, which now accounts for around 50% of overall market volume, falls off considerably in the final minutes as urgency increases and waiting around hoping for liquidity in dark pools (ATSs) becomes increasingly untenable.
Why institutional traders choose IEX at the end of the day
We believe IEX represents a sweet spot between lit and midpoint liquidity that aligns well with institutional trading needs at the end of the day. As firms deprioritize dark pools, IEX remains a potent source of accessible midpoint liquidity. During this time, we see elevated Institutional Broker Hit Rates on Midpoint Orders, as traders become more aggressive and participation spikes near the close.
Looking at displayed trading, spreads are tightest in the final minutes of the day. Queues also lengthen out, giving firms more options of where to source displayed liquidity than at any other time of day.
IEX has two major advantages for displayed liquidity takers: a less expensive fee to remove displayed liquidity than other maker takers like NSDQ, NYSE, or ARCA, and substantial hidden liquidity intraspread, increasing the opportunity for price improvement.
End-of-day routing at IEX
IEX’s growth in the final 10 minutes reflects a shift: institutional traders are prioritizing venues with high-quality liquidity when it matters most. While some still view IEX through the lens of total market share, the final minutes of the day into the close show a different picture: one where IEX plays a much larger role in institutional execution.
As institutional brokers increasingly look to optimize routing into the close, we believe it’s important to review IEX’s growth during this time. IEX’s relevant market share going into the bell may be substantially larger than people had been considering when making routing decisions in the past.
If IEX isn’t already a meaningful part of your routing strategy in the last 10 minutes of the trading day, you might take a closer look at where your fills are coming from. And what you might be missing.
Contact your IEX coverage to learn more or bdteam@iextrading.com.
IEX Exchange firm classifications are on a best-efforts basis by member firms’ trading sessions and other data.
IEX Exchange