EdgeTrade, an agency-only broker and algorithmic trading software developer, announced Monday it was ranked top for trading Nasdaq stocks in Institutional Investor magazine’s 11th annual survey of global transaction costs.
The survey was conducted for Institutional Investor by transaction cost analysis firm Elkins/McSherry and spans 12 months ending 30 June. Elkins/McSherry analysed data on more than 420 billion shares traded by over 1,100 money managers and 1,900 brokerage firms globally, to measure trade cost and market impact performance.
Elkins/McSherry says it ranked brokerages by comparing prices obtained for clients with the volume weighted average price (VWAP) for identical stocks on same-day trading. It also ranked them according to arrival price.
EdgeTrade was 17.9 basis points better than average for Nasdaq-listed trading as measured against VWAP.
EdgeTrades smart order execution algorithms comprise FAN, Covert and Sumo. The algorithms are designed to anonymously fill orders electronically through high-speed market connections that interact with streaming quantitative, analytical and adaptive methodologies, says the firm.
FAN simultaneously sprays aggregated displayed and non-displayed markets, and then continuously moves an order in line with shifting liquidity until best execution is fulfilled, according to EdgeTrade.
Covert, a tool for institutional traders wishing to send electronic orders to dark pools only, is an extension of FAN.
Launched in 2005 as the antidote to a market order, Sumo is a time- sensitive strategy designed to get trades done quickly while minimising market impact and information leakage.