Bank of America Merrill Lynch
By looking at the transaction costs of past trades, BAML aims to estimate the transaction costs of future trades and allow comparisons across trading strategies for a specific trade list as well as measure the trading performance of the broker. BAML’s transaction cost analysis service assesses how well the client’s decision has been acted on and how it improves overall performance.
Asset classes and markets
BAML offers its TCA service in all markets where it has a direct market access and algo presence. Within Asia, this includes Indonesia, Malaysia and India.
Benchmarks
BAML’s TCA supports all basic industry benchmarks as well as custom benchmarks. While VWAP and implementation shortfall are the two most commonly used in Asia, there has been an increase in the participation weighted price benchmark as well. This framework can also include additional constraints and parameters required by clients as well as comprehensive user-defined analytical reporting.
Reporting options
BAML’s TCA report can also be prepared and sent for any time frame and can be completely customisable.
Consultancy services
In addition to the generic information in reports, BAML’s TCA provides benchmark comparison with a relevant reference price, highlights the opportunity for price improvement and shows a breakdown of alternative trading venues.
Pre-trade analysis
Pre-trade analysis provides the best measures of the implicit costs related to the implementation of an investment decision. BAML execution desk provides realtime consulting services to clients including the costs due to spread, market impact and other factors using its Market Color proprietary pretrade analysis tool and monitoring system.
Future plans
There are several ways to fine-tune the measurement of transaction costs. An expanded version will include all the execution desks including high-touch and program so that clients are able to receive a more complete picture of their orders from one broker. BAML’s Global Execution Services is continually updated with the latest algorithms and trading strategies and tracks deployment conditions.