Bank of America Merrill Lynch (BAML) has added new equity pairs trading strategies to its global algorithmic trading suite.
Noting continued client demand for pairs and other market-neutral strategies, such as statistical and risk arbitrage, the firm said the pairs algos will work in conjunction with its smart order router, thereby enabling access to a wide range of liquidity sources.
The new algos contain key risk controls across four strategies – Spread, Ratio, Inverse Spread and Inverse Ratio – and are available directly via leading order management systems.
“Our trading desks already are using these algos with great success,” said Dan Nachtman, product manager and director of execution services at Bank of America Merrill Lynch. “We think our clients will quickly realise the quality of our new offering and adopt them as core strategies.”