Magma Trading
Magma Trading USA, LLC is a technology firm that has built a system to allow institutional broker-dealers and market makers to meet electronically. Tor Brokerage has partnered with Magma to offer the Magma platform to broker-dealers. Magma will allow sophisticated broker-dealers to aggregate liquidity and make markets for the benefit of institutional broker-dealers and their clients.

Magma’s system is designed to display automated indications of interest (IOIs) from market makers to buy or sell stock. If these IOIs attract an order to transact, Magma’s platform will help to enable the trade. Magma’s system allows sophisticated broker-dealers to aggregate liquidity found at national exchanges and at other trading venues in order to fill orders sent by other brokers. Magma’s unique trading structure allows the market maker potentially to improve its chances of profitably executing the trade without fear of getting run over by high-speed electronic sweeps.

Market for Magma's Services

The current volume of trading in the US equities market is about 7 billion shares per day. The approximate institutional brokerage volume is estimated at one-third of the total. This volume, plus some trading by brokers, is the trading that could benefit from Magma’s platform, a total that is estimated at over 2.5 billion shares per day. Magma users will be the institutional brokers and large market-making brokers that comprise that volume.

Magma’s system is structured to benefit the market in several ways. The innovative aggregation structure can allow both liquidity providers and institutional broker-dealers to trade more efficiently. Magma aims to help both market-making firms and institutional brokers by offering a transparent way for buyers and sellers to interact. Market makers have a safer way to provide liquidity, and institutional broker-dealers can quickly and efficiently execute orders with their clients.

Moving Ahead
Getting started with Magma is a simple process. After signing the client agreement with Tor, a broker-dealer can connect in one of several ways. A Tor client can trade on Magma through an order management system, an execution management system, or an algo provider. Our team can work with your system provider to enable the connection. Alternatively, Tor clients can establish a direct connection to the Magma platform, which is located in the Equinix NY4 datacenter in Secaucus, New Jersey. Market data and order-entry APIs are available, and our team is ready to help your firm with integration and testing to get you started.
Client Consent of Waiver for Orders Sent to Magma ATS: Client acknowledges and understands that when it sends orders to Magma ATS, Client may not receive any better-priced executions resulting from compliance with the Order Protection Rule requirements of Regulation NMS. In those instances, in which Client sends orders to Magma ATS, Client hereby elects to waive receipt of any better-priced executions in connection with those orders. Client understands that by waiving receipt of any such executions, its order may not be executed at as favorable a price as may have been available had it received such executions.