A recent poll of buy-side head traders found the majority are unsatisfied with the standard algorithms provided by their brokers, as they look for a more personalised way to execute trades.
Greenwich Associates’ latest report found just 7% of US buy-side institutions are happy with the standard broker algos used for trading.
Many senior traders expressed the need for algos to be customisable to suit their order and trading style, something standard algos do not provide.
“Traders are ever more focused on transparency and customisation and expect their sell-side coverage to provide expertise in market structure and the regulatory landscape,” the report said.
As equity markets evolve into a complex array of exchanges, ATS’s and dark pools, navigating the market would be near impossible without algorithms and smart-order routers.
Richard Johnson, vice president for the Greenwich Associates market structure and technology group, explained customisable tools are becoming increasingly important to buy-side traders.
He said it’s important buy-siders “can customise algos and risk controls and manage access to venues when executing—through algos and high touch trades alike.”
Don’t forget to rate your algo provider in The TRADE’s 10th annual Algorithmic Trading Survey.