IEX also known as the Investors Exchange is a stock exchange based in the United States. Started by Brad Katsuyama , it opened for trading on October 25, The matching engine is located across the Hudson River in Weehawken, New Jersey , and the initial point of presence is located in a data center in Secaucus, New Jersey.

The Investors Exchange | IEX

This microsecond delay adds a round-trip delay of 0. The SEC approved the IEX to be an official exchange on June 17, IEX was created in response to questionable trading practices that had become widely used across traditional public Wall Street exchanges as well as dark pools and other alternative trading systems. The IEX exchange aims to attract investors by promising to "play fair" by operating in a transparent and straightforward manner, while also helping to level the playing field for traders.

Strategies to achieve those goals include: These strategies are intended to ensure the trustworthiness of the exchange. A few dark pools are owned by trading companies that pay for certain types of orders to allow them to fill orders within the pool, rather than routing orders to public exchanges.

Trades forwarded to other trading venues are charged a lower rate. IEX has five order types: IEX delays the flow of data from the exchange and ensures that it arrives simultaneously at two points of presence in New Jersey. Traders are not allowed to co-locate equipment adjacent to IEX's own servers, unlike many other trading platforms. IEX has its own low-latency links to other trading venues in the New York region, which it can use to execute trades for customers in under microseconds.

The Investors Exchange | IEX

The point-of-presence links for traders to gain access to IEX have a built-in, round-trip delay of microseconds from a mile coil of fiber, so traders cannot beat IEX's own computers as orders propagate outward.

Before becoming an exchange, IEX operated a dark pool which did not adhere entirely to priority by price then time, unlike other U.

Instead, the IEX prioritized orders by price, followed by broker, and lastly time. Katsuyama argues that this arrangement advantages regular investors contrarily to high frequency trading firms, by preventing, for instance, HFT firms from jumping to the top of the order queue and front-running normal investors.

When IEX applied for exchange status, it dropped the broker-based priority mechanism, and as an exchange it gives priority to the best price first followed by the time of order submittal as do other exchanges.

Michael Lewis ' book Flash Boys [17] focused on the new trading platform, arguing that it was better than other dark pools since it created an equal playing field for investors by slowing down trading. Critics of the book argue that liquidity-provider firms need speed and direct market connectivity to manage risk, [18] and a market that limits speed, such as IEX, would be illiquid and expensive for price discovery. From Wikipedia, the free encyclopedia.

For other uses, see IEX disambiguation. The New York Times. Retrieved 16 September Retrieved 18 June Retrieved 20 July Retrieved 11 May Clarification to Prior Announcement IEX Trading Alert Important Technical Notice Regarding IEX Transition from ATS to Exchange".

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IEX - Wikipedia

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IEX CEO Brad Katsuyama interview: Lies, 'Flash Boys,' and egregious pricing - Business Insider

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