[ S P O N S O R E D C O N T E N T | X E T R A ]
Xetra is the reference market for German equities and a wide range of European ETFs, offering the highest liquidity in lit continuous trading and auctions for these instruments- making it the primary venue for price discovery. To leverage this position, Deutsche Börse Cash Market launched Xetra Midpoint in December 2024, a new dark pool which is seamlessly integrated into the Xetra market.
Xetra Midpoint serves a wide range of participants, from international banks and proprietary trading firms to member firms who are active on domestic venues and have long sought reliable dark pool access within the Frankfurt Stock Exchange framework.
With new clients onboarding and active clients ramping up their trading activity, turnover has increased constantly, from about ¤ 2 million average daily volume traded( ADVT) in December 2024 to ¤ 3.3 million in January 2025 and ¤ 9.2 million ADVT in February 2025. In March 2025, at the time this article was written, the highest daily turnover so far was ¤ 30.8 million.
Liquidity on Xetra Midpoint has a unique profile compared to other dark pools in Europe. It has a distinct active and growing client base, and real-time reference prices which eliminate adverse selection risk coming from stale prices and latency arbitrage – something which occurs frequently on other venues.
Two different order types for Xetra Midpoint trading Xetra Midpoint is a trading model under the exchange rules of the Frankfurt Stock Exchange that is exempted from pre-trade transparency under a MiFIR reference price waiver. Midpoint
Xetra Midpoint dark pool expands quickly
After three months in the market, Deutsche Börse’ s Maximilian Trossbach and Lukas Neumann share first insights into their dark pool – Xetra Midpoint – from the technical and functional design, to facts and figures that are not in the public market data.
orders in the Xetra Midpoint order book are never displayed and can be equipped with order limits to prevent execution if the prevailing midpoint price is beyond that limit, and a minimum acceptable quantity( MAQ) to make sure the order is not partially executed below the defined size.
Clients can trade the real-time midpoint of the best bid / best ask spread of Xetra’ s central limit order book during lit continuous trading. The technical design ensures that all incoming orders are strictly sequenced across both order books and are processed one-by-one in the same central matching engine, with the reliability and speed that clients can expect from the T7 trading system.
This is the technical foundation for Deutsche Börse Cash Market to also offer a dark-to-lit sweep order that has no latency disadvantage compared to orders going directly to the central limit order book- a“ no regret” option for a price improvement.
Sophisticated matching logic facilitates timely execution of the highest possible volume Orders in the Xetra Midpoint order book are prioritised by their volumes and their entry timestamps( in case of identical volumes), and under consideration of individual MAQs. The matching algorithm of Xetra Midpoint combines the advantages of auction mechanisms and continuous trading, facilitating immediate execution at order entry, and orders are matched in a way that maximise the overall executable volume across both sides of the order book at the current midpoint price. Executions can
22 // TheTRADE // Q1 2025