--- title: ATS Launches Auction Model description: ATS Launches Auction Model --- ![websites-group](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/new-MMG-01.svg) [![](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/dropdown-new-marketsmedia-logo.svg)](https://www.marketsmedia.com/) [![](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/dropdown-menu-traders-redlogo.svg)](https://www.tradersmagazine.com/) [![](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/dropdown-menu-bestexe-logo.svg)](https://www.bestexecution.net/) [![](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/dropdown-menu-fidesk-logo.svg)](https://www.fixglobal.com/) [![](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/dropdown-fixglobal-new-logo.svg)](https://www.fixglobal.com/) - [*Facebook*](https://www.facebook.com/MarketsMedia/) - [*Twitter*](https://twitter.com/marketsmedia) - [*Linkedin*](https://www.linkedin.com/company/markets-media-llc) - [Newsletter](https://articles.marketsmedia.com/ats-launches-auction-model#popup-newsletter) #### Want the latest news on securities markets -- FREE? 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PDQ Enterprises, the developer and operator of the PDQ Alternative Trading System, officially announced on Wednesday the launch of its auction model, which it said is the first of its kind in the high-speed equity trading landscape. The auction system will work through an “electronic algorithmic crowd” competing for orders. The way the new auction system works is, when an order is received by PDQ, the order is then paused for 20 milliseconds, during which algorithms respond with their most competitive quotes, building a book where the responses are prioritized on a price-time basis. After 20 milliseconds, the trade is then matched against that book. “When we pause the order, we then query the customers that have algorithms running at PDQ and ask them for their market,” Keith Ross, chief executive officer of PDQ told Markets Media. “We give them 19 milliseconds to respond to us with marketable orders, we assemble them into a book, which is similar to the old days at NYSE, and then trade the order against the book. All of this takes place in 20 milliseconds. This creates an opportunity for the order to be improved either by better price or size.” This addresses one of the concerns some investors have with the lit markets, where when an order is placed, other participants see the order and can then react. In this auction process, it requires them to respond first, and with a marketable order, not an indication. “Usually at dark pools, someone may bid, someone else comes and misses it, the order gets cancelled, that type of sequencing makes it very difficult to get a match,” said Ross. “That’s why match rates at dark pools are so low. With the auction model, the order triggers a query of the market. We have all these people interested in this stock respond, then we aggregate liquidity for the order to execute. In most markets, you have to swing and hope you hit whatever happens to be there.” Depending on the type of trader, 20 milliseconds may make or break a trade. However, many traders are now looking beyond speed and are instead aiming to get the best price possible. In addition, under the PDQ auction model, if the order isn’t completely filled within the 20 millisecond pause, the company’s routers will then send it to other dark pools or the lit markets to have the rest of the order filled. [Share](https://www.facebook.com/share.php?u=https://articles.marketsmedia.com/ats-launches-auction-model) [Tweet](https://twitter.com/intent/tweet?text=US+ETFs+Have+Record+Net+Inflows&url=https://articles.marketsmedia.com/ats-launches-auction-model) [Share](https://www.linkedin.com/cws/share?url=https://articles.marketsmedia.com/ats-launches-auction-model) ![email](https://articles.marketsmedia.com/hubfs/Markets%20Media/email.svg) ### NEWSLETTER SIGN UP And receive exclusive articles on securities markets ### Related articles 1. 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