Agency brokerage and trading technology provider ITG has extended its European algorithmic offering to cover markets in Israel, Hungary and Poland.
ITG says it has tailored its suite of algorithms to reduce market impact, maximise execution quality and improve trading performance in each market. The firm's European algorithmic offering is now available across 21 markets.
According to Rob Boardman, CEO for ITG in Europe, stocks previously considered to have niche appeal as part of local or emerging markets funds are increasingly being held in broader European portfolios.
“We are one of a few firms putting the building blocks in place for international investors that want to access this part of the world in the coming months,” Boardman told theTRADEnews.com. “This all depends on whether trading practices are brought in line with international standards, i.e. allowing competing venues, post-trade structures and more representation in international indices. Traders are more inclined to invest in these markets if they can use the same methodology as in their core portfolios.”
ITG's launch of algo services in Israel, for example, comes shortly after index provider MSCI Barra announced the inclusion of Israel in its MSCI World and Europe, Australasia and Far East indices in May, rather than its emerging markets set of indices.
Boardman expects that the most successful algorithms in the three new markets will be those that do not trade based solely on historical liquidity, such as ITG's Active algorithm.
“Algos that are more adaptive to real-time conditions and have the ability to respond to liquidity that can be both low and variable will deliver better results than algos such as VWAP, which assumes that markets are always liquid and that the conditions for a stock are constant. In these kinds of markets, a more flexible approach is required,” he said.