Goldman’s new platform unveiled in Asia

Goldman Sachs' new Asian algorithm platform is complete and has been rolled out across the continent.

Goldman Sachs new Asian algorithm platform is complete and has been rolled out across the continent.

The company said it was pleased with the progress made, given that the initial scope of the algorithm platform upgrade across the whole region had been so big.

“The new trading platform encapsulates a further five years of electronic trading experience,” said Ian Smith, head of Goldman Sachs Electronic Trading in Asia Pacific,  It is better at trading both developed and emerging markets, plus understanding the difference between the two and finding liquidity.”

Goldman focused initially on its core developed markets first then extended it to emerging and ASEAN markets. 

An important aim of the new platform is to improve on the sourcing of liquidity.  It is designed to intelligently use order book signals and order placement.  It thinks about the type of information that orders give to the market and the information it can get from the market about how to trade better.

Currently, there are sets of illiquid stocks that humans may conceivably be better at trading than machines, given that humans can, at times, be more patient.  Making machines smarter and enabling them to trade those stocks is always therefore an end-game.

The platform uses signals it calculates from the order book to work out when best to place the order. Tests have revealed an improvement to execution quality, in the sense of tracking to a benchmark, say, a VWAP or an arrival price.

This new rollout is not the culmination of the work Goldman is undertaking in execution, and the firm now plans to continue building into the platform. 

That could mean new algorithms, smarter intelligence, searching for constant improvements and fixes plus finding difficult market trading scenarios that the platform can handle in a smarter way.

They find that their clients’ expectations about how they want to see orders traded continue to develop over time, so they have to invest in the platform to meet their expectations. It is a never ending task.