DESCRIPTION & HISTORY
What is Direct Edge?
Direct Edge is America’s newest stock exchange—an electronic marketplace where investors can buy and sell U.S. stocks. With daily volumes routinely exceeding 1 billion shares a day, Direct Edge is consistently ranked third or fourth in trading volume among U.S. stock exchanges.
Direct Edge was originally launched in October 2005 as an Electronic Communications Network (ECN) owned by Knight Capital Group. It operated in a similar capacity as an exchange, matching buyers and sellers of U.S. equities on its two ECN platforms, EDGA and EDGX. In June of 2007, Knight spun off the firm, with William O’Brien brought in as CEO. With innovation at the forefront, the business grew and in December 2008, the International Securities Exchange took a major stake in Direct Edge. As part of that deal, Direct Edge acquired operational control of the stock exchange of the International Securities Exchange.
In March 2010, the SEC approved Direct Edge’s conversion from an ECN to a full-fledged, licensed stock exchange. In July 2010, the ISE Stock Exchange was decommissioned and both EDGA and EDGX ECN platforms began operation as independent stock exchanges.
Does Direct Edge operate as an independent firm?
Yes – Direct Edge is an independent exchange owned by a consortium that includes the International Securities Exchange (ISE), Knight Capital Group, Inc., Citadel Derivatives Group, The Goldman Sachs Group, and J.P. Morgan. Knight Capital Group was originally the sole owner until a 2007 spin-off brought in Citadel and Goldman as investors. Following a deal in 2008 (see next question), the ISE is currently the largest shareholder of Direct Edge with a 31.54% stake. Knight, Citadel, and Goldman, each retained 19.9%.
As a fully independent company, Direct Edge has built an independent management team led by William O’Brien in addition to a dedicated technology and operations personnel responsible for marketing, improving, and maintaining Direct Edge systems and member services.
What about the ISE Stock Exchange?
On December 23, 2008, Direct Edge completed a transaction with the International Securities Exchange (ISE) in which the ISE became a strategic investor in Direct Edge, and Direct Edge took operational control of the ISE Stock Exchange. With the EDGA and EDGX Exchanges officially launched, the ISE Stock Exchange was fully decommissioned as of July 19, 2010. The ISE continues to operate as an options exchange under full ownership of Deutche Borse. For additional information about the ISE Stock Exchange, please click here.
What is the plan to address contingency events?
Please see our Business Continuity Plan.
What types of orders does Direct Edge accept?
Direct Edge accepts Market, Limit, Immediate or Cancel, Reserve and Extended Hour Orders. These orders can be executed at the limit price or better. These orders are executed on a price-time priority.
What stocks are traded on Direct Edge?
Direct Edge currently trades in all U.S. equities—Tape A (NYSE-listed), Tape B (Arca/Amex listed), and Tape C (Nasdaq-listed) securities.
How can I view the Direct Edge order book?
Direct Edge offers both Multicast and Unicast depth of book feeds. Specifications are available on our Edgebook Depth page.
How much does it cost to trade with Direct Edge?
Please see our Fee Schedule.
What are the hours of operation?
Members are able to enter orders from 8:00 a.m. to 8:00 p.m. ET. During this time, our operations desk will be available to assist you in answering your inquiries and address any trading, technological or other matters.
What kind of firms can trade on Direct Edge?
Direct Edge offers its services to SRO registered broker-dealers in good standing located in the United States. Institutional clients seeking to access Direct Edge may do so through their broker-dealers.
How do I become a member of Direct Edge?
All relevant documents can be found on our Member Documents page, starting with the Membership Applications for both EDGA and EDGX. Contact your sales representative directly or call 866.472.5267 for specific instructions to becoming a Member.
How do I connect to Direct Edge?
All connectivity and order entry information is also located on our Member Documents page. If you are having trouble connecting or would prefer to speak with someone directly, contact Direct Edge Member Services at 201.942.8220, option #3.