Autobahn Equity, the electronic equity execution business of Deutsche Bank, has launched a new algorithm, based on its proprietary Stealth liquidity-seeking strategy, in more than 30 markets around the world.
Over the past four weeks, the bank has introduced the algorithm in the US, Europe and many of the Asian markets.
The algorithm has been designed to help the buy-side cope with today’s tougher trading conditions, characterised by wider spreads, faster quoting, thinner liquidity at the top of exchange order books and off-exchange trading growth.
According to Rob Flatley, managing director and global head of Autobahn Equity at Deutsche Bank, traders need to execute quickly in today’s volatile markets to avoid adverse price movements, but that this can result in market impact. “Stealth allows you to execute with a high degree of urgency with minimal impact on the quote,” he told theTRADEnews.com. “In aggressive mode, it makes use of some of the non-displayed order types on trading venues, avoids posting liquidity and uses dark pools.”
He added that Stealth could also trade more passively, for example when trading less-liquid stocks. This ability to adopt a passive, aggressive or neutral approach, he contended, makes the algorithm particularly useful to the buy-side.
“Heads of desk would prefer to have one toolset than lots of separate tools,” he said. “With the Stealth algorithm they can use the same strategy to trade exchange-traded funds, which are highly liquid and traded with urgency, and less-liquid stocks. It takes a lot of confusion out of the process.”
The algorithm’s availability in more than 30 countries allows buy-side clients to adopt a consistent execution strategy around the globe, according to Flatley.
“In a market where there is major disruption at large global providers, high volatility, liquidity fragmentation and dispersion, people are looking for certainty, consistency and a global approach,” he said. “We think it is a great time to be launching this algorithm, and we have already seen huge interest and uptake.”