The electronic trading arm of Deutsche Bank, Autobahn Equity, has unveiled a new version of its Stealth liquidity-seeking algorithm, which uses high-frequency trading (HFT) models to help institutions interact with short-term liquidity more effectively.
Stealth now incorporates HFT metrics, allowing it to make decisions in the short-term about factors such as stock valuation and order placement, similar to the strategies used by electronic market makers and statistical arbitrage traders.
This will enable long-only buy-side firms and their clients to use the same techniques as high-speed firms to trade against low-latency flow in the most effective way.
The algo adapts to intraday market conditions, offering a range of options to control how and when to access liquidity, and also leverages SuperX Plus, the bank's dark liquidity seeking algo, to trade across non-displayed markets.
Stealth will initially be made available in the US and Europe, with an Asian version of the algo expected in due course.
“Clients have been extremely receptive to the new functionality offered by Stealth,” Andrew Morgan, head of Autobahn Equity Europe, Deutsche Bank, told theTRADEnews.com. “Institutions have long held concerns about HFT, and they now have a tool that offers them the ability to use the same techniques as liquidity providers and protect alpha.”
To complement Stealth, Deutsche Bank is also rolling out an intraday post-trade analytics tool, which maps fills within the bid/offer spread and will provide clients with visual examples of the algorithm's performance.