Not all pools are created equal. Some are dirty. You know this. We know it too.

Luminex has been quietly, yet diligently, moving towards a launch of their dark pool this last year. However, to us, it doesn’t sound like any dark pool we have seen over the last fifteen years, so perhaps dark pool is not the right word to use for the Luminex ATS.

As you undoubtedly know, presumably frustrated with the conflicts and leakage resulting from loss of control of their order flow when entered through broker-dealer and third-party technologies, nine large money managers collectively decided to shape the trading landscape they must invest through. They have put their money where their collective mouths are, and have created a block trading mechanism that is designed to trade size among members with shared interests, with minimal gaming.  Luminex.

Reuters has just reported that Luminex expects to begin trading in early November, and that they have already signed up in excess of seventy institutional subscribers. This will undoubtedly grow. One only needs to read who their management team, investors, board, and advisory committee is to understand the integrity involved with this undertaking. And if one point is not clear to anyone over the past five years, it should be: Integrity and Trust are the most important core elements required in today’s anonymous and conflicted trading environment.

Here is a cheat sheet of Luminex facts, and I hope the Luminex Head of Sales (Brian Williamson) does not object to our broadcasting them:

Ten Luminex Quick Facts:

  • Ownership: 9 buyside firms (Blackrock, BNY Mellon, Capital Group, Fidelity, Invesco, JPMorgan Asset, MFS, State Street, T. Rowe Price)
  • A management team, board, and advisory committee that each exemplifies trust and integrity.
  • Their subscribers to date.
  • Luminex approves subscribers – it is not open to all firms.
  • “Three Quantities” of a Luminex Order: AutoEx + Negotiable Possibility = Total Quantity
  • Luminex Orders Pegged to Mid, and will also execute in a locked market.
  • Luminex Matching Priority = Autoex Q, then Top Q, then Time Priority.
  • Luminex Matching Price = Weighted Midpoint
  • There is no “Quote Feed”
  • Luminex does not route to other markets.


Commentary and Predictions:


  • Luminex will have traction, and gain traction, and succeed.
  • Luminex will have the highest average trade size of any US trading exchange and dark pool ATS, which will be verifiable on Finra’s website.
  • Luminex will provide the cleanest picture of a “natural crossing rate” that the industry has ever seen.
  • Being part of a trade on Luminex will not mean that you will have no price impact (the entire industry understands that natural laws of supply and demand have much to do with trading impact cost). However, being part of a trade on Luminex will mean that you will likely have less price impact than with any other trading tool, as you will control your minimum quantities, and you will have eliminated so much of the unwanted intermediation that takes place when you currently trade in today’s fragmented and segmented marketplace.
  • Luminex does not have short term liquidity providers and/or market makers as subscribers. You, the ultimate owners of the market, will be the liquidity providers.
  • Luminex users will not be trying to “capture spread”; they will be trying to invest in equities in a complementary way (blocks) to other means they already use to execute investment ideas.


Finally, Themis has no relationship with Luminex. We are intrigued by their undertaking, and are supportive of any investor-friendly initiative. Luminex absolutely is such an initiative.


As a large number of our clients are already involved with or subscribed into Luminex, this note is certain to be redundant to you. To our clients who are not members, we highly encourage you to learn more by contacting Luminex Head of Sales – Brian Williamson. Happy swimming!