We analyse the trade characteristics and market conditions which determine the market share of an electronic order book at the London Stock Exchange, where an "upstairs" network of dual-capacity rms is also available for trade. We hypothesise and empirically verify that execution and information risks govern the choice of execution mode. Further, we uncover strong commonality in the market share of the order book across stocks, and find that variables proxying for market-wide liquidity and informational risks also affect the choice of trading venue. These findings appear robust to possible endogeneity of the measures of order book liquidity. They suggest that competing, offbook liquidity suppliers voluntarily perform at least some of the "stabilisation" functions normally assigned to designated market-makers.
