Are you ready for high-touch actionable IOIs?

Actionable indications of interest (IOIs) have been controversial over the past year, as a debate raged about whether they should be considered and treated as actual quotes. Some think actionable IOIs should be published alongside bids and asks included on the consolidated tape. Before that is even decided, you have to wonder if actionable IOIs are already morphing a bit?

Citigroup (NYSE: C) has developed a system, called Total Touch, that seems to marry high-touch trading with IOIs. The price is sent through traditional IOI venues and order management systems. According to Traders, once a client clicks on a quote, both the sales trader and the trader get a pop-up and an algorithm begins working the order immediately. The trader monitors the stock and can hedge if necessary, and the sales trader is freed to provide service to the client, which might entail a call or some form of live communication.

The service essentially guarantees a transaction, with Citi's capital at risk. "The quote is essentially a stop, which ensures that a customer will do no worse than that price," explains a Citi executive. Another way to view it: it's essentially automated high-touch trading, which will strike many as an oxymoron. The key benefit is efficiency, essentially a way to lock in terms. 

For more:
- here's the article

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