Block trading platform operator Aritas traded €2 billion in Europe via its algorithmic switching service Alpha Pro last year, suggesting there is a market for algorithms which deal with difficult trades.
Alpha Pro recommends trade execution strategies upon order arrival, based on real-time analysis of comparable past orders and outcomes. The new version of Alpha Pro, released in January, also lets traders adopt strategies designed for the benchmark of their choice.
Unusually for an algorithm-based product, Alpha Pro is designed for particularly difficult trades, Jay Biancamano, executive chairman, Aritas.
“Our clients use Alpha Pro for the hardest trades in difficult names,” he said. “We’re not talking about the most liquid blue-chip stocks, but rather tougher trades that require careful, intelligent handling.”
Alpha Pro was launched last summer to join Aritas’ existing trading tools – its algorithm switching engine, and the Block Board, a multilateral trading facility. Alpha Pro and the switching engine use real-time predictive analytics and market signals to recommend trading strategies and choose appropriate algorithms over the course of the trade. The technology draws on some 180 different strategies in total.
“Not all algos work at all times,” said Biancamano. “The algorithm switching engine can detect that an order is starting to be picked off by high-frequency traders, for example, and will change from one algo, such as a volume-weighted average price (VWAP), to another, such as a participation algo, if that is a better course of action.”
Pipeline Trading Systems rebranded as Aritas Securities in January as part of the firm’s comprehensive restructuring effort. In the European Union, the company is known as Aritas Financial. Biancamano joined the company in November after working at block crossing network Liquidnet and agency broker ITG.