It is not always easy to get a clear understanding of

what's going on when confronted by large amounts of

data. The usual solution to this is to step back in order to get

some perspective and understand the bigger picture. The other

approach is to zoom in on a small part of the detail and see if

it is representative of the whole.

Take a look

at the FFI for

href="http://fragmentation.fidessa.com/stats/stock/BYG.L.html"

target="_blank">Big Yellow Group, a title="FTSE 250"

href="http://fragmentation.fidessa.com/stats/index/MCX.html"

target="_blank">FTSE 250 stock, for the week ending

18 June:

href="http://fragmentation.fidessa.com/wp-content/uploads/ffi_bygl.png"> class="size-medium wp-image-1159 alignnone" title="ffi_bygl"

src="http://fragmentation.fidessa.com/wp-content/uploads/ffi_bygl.png"

alt="Fidessa Fragmentation Index" width="350" height="150"

/>

Despite the fact that its FFI

is above 2 it was actually only the 50th most fragmented stock in

the

href="http://fragmentation.fidessa.com/stats/index/MCX.html"

target="_blank">FTSE 250 last week. This shows just

how deep the impact of fragmentation has become and how it has

gone way beyond the blue chip stocks that it all began with and

is now affecting even those stocks with relatively low

turnover.

Dig a little deeper and the title="Fragulator BYG.L"

href="http://fragmentation.fidessa.com/fragulator/?fim=BYG.L"

target="_blank">Fragulator shows an even more

interesting picture.

In that same week, just

under 60% was traded on lit venues whilst the rest was spread

over dark MTFs, Systematic Internalisers and OTC trading.

However, the average trade size between the dark MTFs and the lit

venues was almost identical and so you have to wonder, at least

in this case, whether the extra cost and hassle of routing to the

dark books was actually worth it. When you consider that the

seven dark books concerned accounted for less than 7% of that

week's volume you start to wonder whether the best

execution imperative is all going a bit too far.

This seems to be especially the case for the buy-side,

many of whom prefer to deal in chunky blocks rather than have

their orders diced into smaller and smaller pieces and sent

spinning round lit and dark platforms in search of a

partner.

This extra confusion means that the

buy-side has to work harder and harder to form a view as to how

stocks are really trading so as to make sure that they are being

effective. This makes it difficult to select the right broker and

to assess their executional effectiveness.

Maybe what we need is a concept of "good

enough" execution as the extra cost and complexity

involved in going for "best" is making it

harder and harder to achieve.