Smooth Trading17 Nov 2025 16:00
SETS and SETSqx are two different trading services on the London Stock Exchange (LSE), primarily distinguished by the liquidity of the securities they trade. SETS is for highly liquid stocks, while SETSqx is for less liquid securities.
SETS (Stock Exchange Electronic Trading Service)
Liquidity: Used for highly liquid securities, such as those in the FTSE 100 and FTSE 250 indices, and the most actively traded smaller companies.
Trading Model: Operates as a continuous electronic order book system. Buy and sell orders are matched in real-time throughout the trading day, bypassing traditional market makers in many cases.
Price Discovery: Continuous price discovery leads to more fluid and sometimes more erratic price movements, with support and resistance levels working better for technical trading.
Order Type: Primarily uses electronic orders, which can be named or anonymous.
SETSqx (SETS: Quotes and Crosses)
Liquidity: Designed for less liquid securities, including most AIM stocks and smaller Main Market companies.
Trading Model: A hybrid system that combines periodic electronic auctions with a non-electronic, quote-driven market making facility.
Trading Process:
Auctions: There are several scheduled electronic auctions throughout the day (e.g., at 8am, 9am, 11am, 2pm, and 4:35pm) where orders are publicly visible and then matched at a single uncrossing price.
Quote-Driven: Between auctions, the market is quote-driven, meaning market makers provide bid and offer prices, guaranteeing liquidity up to a certain size.
Price Discovery: Prices tend to trend in a more orderly fashion, but "breakouts" might be due to a market maker adjusting a quote rather than genuine market pressure.
Summary of Differences
Feature SETS SETSqx
Liquidity High (FTSE 100, FTSE 250, etc.) Lower (Most AIM stocks, smaller companies)
Trading Type Continuous electronic order book Hybrid (Periodic auctions & quote-driven)
Market Makers Less involved in day-to-day matching Provide ongoing quotes to guarantee liquidity
Price Discovery Real-time, continuous Periodic uncrossing prices from auctions
Order Visibility Publicly visible continuously Visible during specific auction call periods