THETRADETECH DAILY THE OFFICIAL NEWSPAPER OF TRADETECH 2026
How do you see the role of bilateral trading evolving over the next three to five years? In equities, I see bilateral trading becoming a more established and systematic part of the execution toolkit over the next three to five years. The growth story is not only about more flow moving bilaterally, but about direct liquidity becoming more deeply integrated into buy-side workflows through EMS connectivity and smart order router.
At the same time, I do not think bilateral trading replaces lit markets, it works best as a complementary source of liquidity for specific order types, particularly where immediacy and market impact control matter most.
Another important development over the past year is that bilateral liquidity is no longer accessed only through direct market-maker relationships; brokers are increasingly part of that workflow as well, whether through their own SI liquidity, smart routing or broker solutions that aggregate bilateral streams.
In which asset classes does bilateral trading offer the most advantages for the buy-side? From a buy-side perspective, I would start with European equities, because that is where bilateral trading is already delivering practical advantages today. In the post-Mifid II environment, bilateral liquidity has become a meaningful part of the European equity market structure, particularly through SIs and the broader development of electronic liquidity provision.
It can be particularly valuable for flow where the trader wants size, immediacy and lower signalling risk, and where bilateral interaction may produce a better execution outcome than simply exposing the order more broadly. That is especially relevant in a fragmented liquidity environment, where the buy-side is increasingly looking for alternative ways to source liquidity efficiently. In practice, the strongest use cases in equities are often rebalances, cash-flowdriven activity or other relatively benign institutional flow, where the objective is to access liquidity efficiently while minimising unnecessary market impact.
Exploring the buy-side benefits of bilateral trading
With bilateral trading in equities expected to grow, particularly across European markets, The TRADE sits down with Matthieu Chomez, execution trader at Societe Generale Luxembourg, to analyse how the process will help buy-side firms access liquidity more efficiently while maintaining control.
How should buy-side firms think about TCA for bilateral flows? I think the main thing with TCA on bilateral equity flow is that it cannot just be treated as a standard benchmark exercise. Of course, price matters, but if you have gone bilateral to reduce signalling risk, improve execution certainty or access liquidity more efficiently, then TCA has to tell you whether that decision actually delivered the outcome you wanted versus the alternatives.
Another important point is around reversion. In bilateral flow, I would not look at it purely on an order-by-order basis. The more meaningful analysis is often at counterparty level- asking whether flow done with a particular counterparty tends to be followed by adverse selection or broader market impact. The point is to understand the quality of that liquidity relationship over time, rather than judge each trade in isolation.
And beyond that, TCA should help you understand which counterparties consistently add value, in which names and under which market conditions, because that is what allows you to improve future routing decisions.
How far can bilateral trading be automated without losing its core benefits? In equities, the real question is not how much of bilateral trading can be automated, but which parts can be systematised without losing the qualities that makes bilateral valuable. Bilateral works because it gives the buy-side more control over how it accesses liquidity, how much intent it reveals and which counterparties it interacts with.
A lot of the workflow can be automated: counterparty selection, routing logic and post-trade feedback, and that should improve efficiency. But once the decision becomes strategic, whether because the flow is more information-sensitive or because market conditions are changing, trader judgment still matters.
So I do not see the end-state as full automation, but as a tiered model where repeatable decisions are systematised and strategic ones remain with the trader. If bilateral becomes too mechanical, there is a risk of losing the selectivity and control that make it valuable in the first place.
22 THETRADETECH DAILY