What is the level of off-exchange trading?

The level of off-exchange trading is a function of market structure and will shift based on current market structure characteristics. This report analyzes the data behind the numbers stated above, as well as presents alternative views to measure the level of off-exchange trading.

What is the difference between 'on exchange' and 'off exchange'?

For equities and bonds ‘on-exchange’ consists of trading on Regulated Markets and/or Multilateral Trading Facilities and ‘off-exchange’ covers trading on Organised Trading Facilities, Systematic Internalisers or OTC. For derivatives, ‘on-exchange’ covers exchange-traded derivatives (ETDs) and ‘off-exchange’ covers OTC derivatives.

Is off-exchange trading a sign that flows are shifting?

The increase in off-exchange volumes is an indicator of volume growth, in particular retail trading growth and trading in low dollar stocks, not a sign that flows are shifting. The percent of off-exchange trading is a function of market structure, and the optimal level of off-exchange trading is the actual amount in that given time period.

Do financial assets trade off-exchange?

And indeed most other financial assets trade away from exchanges in over-the-counter (OTC) markets (or ‘off-exchange’). While it is difficult to measure the volume of trading taking place OTC precisely, 1 it is clear that the share of trading taking place on-exchange varies considerably across markets.