ITG boosts algo with dollar-neutral functionality
Agency broker ITG has added
an overlay to its Hedge Pro algorithmic strategy which lets users better
manage portfolio risk.
The enhancement, known as
Switch Trade, allows traders to maintain dollar neutrality when executing a
pairs trade. Portfolios are considered dollar-neutral when the sum of long and
short positions equals zero.
According to ITG, Switch
Trade offers execution tactics to help participants define the sequence and urgency
level of their trades.
“Switch Trade allows traders to efficiently exchange
one position for another by contemporaneously managing cash and minimising leg
risk,” said Jeff Bacidore, head of algorithms at ITG. “ITG Hedge Pro Algorithm
with Switch Trade provides a powerful tool to achieve best execution for
institutional investors confronted with this challenge.”
The Hedge Pro strategy and Switch Trade is available
in the US and Canada, and was recently introduced for markets in Brazil and
All ITG algos are available through the broker’s
Triton execution management system and via third-party trading systems.