Liquidity Landscape: Q3 2025 and Beyond
The Q3 2025 and Beyond Liquidity Landscape report captures a transformative year in the European equity markets, defined by resilient performance amid global uncertainty, renewed European flows, deeper fragmentation, and regulatory reforms redefining liquidity.
Market fragmentation is back, reshaping how liquidity is accessed
After a return to lit continuous venues earlier this year, driven by heightened volatility and the need for rapid execution, fragmentation has returned to its long-term trend. Lit continuous exchanges now account for 43% of total volumes traded, signaling a lasting shift in where and how liquidity is accessed.
Why is this interesting?
Liquidity is moving away from traditional exchanges. Periodic auctions have surged to 11% of total addressable liquidity as of October 2025 (excluding OTC and off-book), thanks to their ability to reduce adverse selection and deliver superior performance. Systematic internalisers have grown from 10% to 13%, while bilateral liquidity represents nearly one-third of overall liquidity.
Relying solely on primary lit continuous venues means accessing approximately one-fifth of total liquidity.To achieve best execution, accessing the full market is paramount.
Why this matters now
Regulatory changes are accelerating this transformation. The introduction of the Single Volume Cap and progress toward a consolidated tape point to a future where liquidity is increasingly dispersed. The competitive edge is shifting from speed of executing an algo order to intelligent selection of which liquidity to access, where, when and how.
Other notable trends:
Trading costs surged late in 2025 as volatility climbed, spreads widened, and touch sizes shrank across European markets.
Closing auction volumes declined as heightened volatility encourages investors to trade earlier in the day.
Appetite for LIS trades has been steadily recovering since August 2025, reversing the mid-year decline.
Please refer to the full report for sources
Gareth Exton Head of Execution + Quantitative Services EMEA, Prashanth Manoharan Head of Execution Consulting, and Henry Baugniet Equities Execution Data Analyst , in partnership with Rebecca Healey, Redlap Consulting