In this post, we use five months of D-Limit data (comparing May-September 2020 to October 2020-February 2021) to show how those expectations have come to life in terms of both IEX Exchange's trading quality and the dynamics of the broader market. We also show how the concerns raised during the approval process have not materialized in the data.

A high level of transparency is one of the great strengths of U.S. equity markets. Transparency in our markets is heavily dependent on the use of displayed bid and offer prices by exchanges. Only exchanges are required to provide this level of transparency, and only exchanges now do so. But the proportion of market activity occurring on exchanges and resulting from displayed prices, also called "lit trading," has been steadily eroding for many years.

Starting January 3, IEX Exchange will charge for market data. I know reading this sentence might make you want to show up at my house with a pitchfork, but before you do, I'm hoping you'll at least read the rest of this blog.

One year ago this month, IEX Exchange launched "D-Limit," a new order type that was designed to do something that hadn't been done in many years: make the quality of displayed trading better.

In this post, we use five months of D-Limit data (comparing May-September 2020 to October 2020-February 2021) to show how those expectations have come to life in terms of both IEX Exchange's trading quality and the dynamics of the broader market. We also show how the concerns raised during the approval process have not materialized in the data.