Morgan Stanley and Credit Suisse have both announced significant boosts to their Asian electronic trading offerings.
Morgan Stanley has launched a customisable algorithm tool, Algorithm Manager, across Asia, with ten clients already live on the system.
Algorithm Manager is a new tool that provides traders with control over the execution strategy of individual orders.
It will be available to all electronic trading clients in the region, and allows traders to automatically switch an order between several different Morgan Stanley Electronic Trading (MSET) algorithms depending on market conditions, time or quantity executed. “[Clients] want flexibility in the way they trade, for example they may want to move from a VWAP to an implementation shortfall algorithm, or from a more to a less aggressive strategy,” said Zach Tuckwell, head of Asia electronic trading for Morgan Stanley.
The launch was driven by interest not only from hedge funds, but increasingly from long-only funds across the region. “We’ve had a huge amount of interest from long only-clients, said Tuckwell. “In the last 6-12 months, they have really engaged in electronic trading and specifically algorithmic trading. Clients are using it to tap into light and dark liquidity and as we see advances in algorithmic trading they are finding innovative ways to trade. The days of the plain vanilla algorithm are diminishing.”
When Algorithm Manager receives an order, execution begins with the default algorithm. Upon occurrence of an event or passage of time as defined in the execution template, Algorithm Manager switches to an alternate algorithm and continues the order execution.
Although traditionally Asia sees new advances in trading technology after the US and Europe, “This has been developed in Asia first,” says Tuckwell. “To be honest we have the demand here, so we put the effort in. From Korea to Taiwan to India firms have different ways to trade. One algorithm does not fit all and so algorithms need to be flexible to adapt to the different complexities of the region.”
Separately, Credit Suisse has boosted its direct market access (DMA) capabilities for clients in Hong Kong, claiming to have achieved DMA speeds of under one millisecond through its Advanced Execution Services (AES) Velocity platform.
The firm claims that AES Velocity is achieving latency figures of 600 microseconds. By comparison, the typical human reaction speed is around 150 milliseconds.
AES Velocity has been available in Japan since January 2010 where, according to the bank, clients who place their trading engines within Credit Suisse’s “racks” to trade stocks listed on the Tokyo Stock Exchange via AES Velocity are able to achieve one-way latency figures of 200 microseconds.
AES Velocity is expected to be available in Australia and Singapore in due course.