- Apr
- 29
- 2009
- 4:22 PM
Together, MatchPoint and Algorithms Take Performance to a New Level
- By: Jim Ross
- File Under: MatchPoint
From Jim Ross: MatchPoint and trading algorithms are two effective approaches to sourcing liquidity and reducing trading costs but when linked together, they take trading performance to a new level. Algos are designed to do two things: find liquidity and minimize transaction costs. In the process of finding where contra-side liquidity resides, the algo has to avoid impacting, leaking or unduly delaying its own trading strategy. Algos, to their credit, are the only feasible way to transact in a fragmented marketplace across place and time.
Imagine, however, how much better an algo could be if it spent its time maximizing the investment and trading alpha of an order as opposed to managing to the costs of a dysfunctional, suboptimal marketplace. MatchPoint provides precisely the type of liquidity-aggregation and lowest-possible-trading-cost environment that complements if not unleashes the full potential of trading algorithms.
Liquidity found! Execution delay and information leakage, no more! MatchPoint and trading algorithms: Effective apart but better together!
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