MEMX, the New Exchange on the Block
MEMX Executes its First Trade
Yesterday morning, a new exchange called Members Exchange, or MEMX, executed its first trade. MEMX is backed by electronic trading firms, Wall Street banks, and other investors. To start out, the exchange will facilitate trades of seven stocks including Alphabet Inc. (GOOG), and ExxonMobil (XOM). Its first trade yesterday was of Consolidated Edison (ED) shares.
MEMX is based in New Jersey and has raised over $135 million from investors. It is expected that the new exchange will provide stiff competition for already existing exchanges.
Competing Against Established Exchanges
Just three exchange groups handle almost 60% of US equities trading volume. These groups are Nasdaq, Cboe Global Market (CBOE), and NYSE, which is owned by Intercontinental Exchange (ICE). These stock exchanges make money on transaction fees, listing fees, market data fees, and more.
MEMX was formed in response to banks and trading firms feeling frustrated by major exchanges raising prices for their services. MEMX plans to offer lower prices than the dominant exchanges, and will give away its data for free initially.
Other New Stock Exchanges
Often, new exchanges struggle because traders want to go where there are already other people to trade with. However, because MEMX has a significant store of cash, it plans to pay out more in rebates than it collects in transaction fees—at least to start out. This means that MEMX will lose money initially as it goes through the process of building its base.
In addition to MEMX, several other new exchanges are launching this month. The Long-Term Stock Exchange went live on September 17, and an exchange called MIAX Pearl, created by Miami International Holdings, will roll out on September 25. Investors will be eager to see how MEMX and these other new players impact the exchange landscape.
Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.