Buysiders now have a greater choice of trading algorithms in Brazil, with the launch of J.P. Morgan’s Brazilian equities algorithmic trading suite.
The offering includes algorithmic trading strategies and direct market access, complimenting the firm’s existing high-touch business in the region. The algo strategies include volume-weighted average price, time-weighted average price, percentage of volume and close. J.P. Morgan currently serves eight markets in the Americas, but Brazil is the first to receive a dedicated algo suite.
“These algos have been adapted specifically for the local market,” said Daniel Ciment, head of electronic trading solutions for the Americas, J.P. Morgan. “We take account of local stock profiles, local auction characteristics such as intra-day auctions and the need to be more sensitive due to the specific levels of market liquidity in Brazil.”
Although algorithmic trading is relatively underdeveloped in Latin America compared to the US and Europe, with liquidity more limited for many stocks, increasing interest in the region – especially in Brazil – is driving international demand for connectivity and more advanced trading solutions.
“We are expecting that these algos will be particularly useful for hedge funds and buy-side institutional investors, based on strong offshore demand from the US and elsewhere for access to the Brazilian market,” said Ciment.
Although the firm has yet to roll out a comparable suite of algos in other Latin American markets, Ciment confirmed that J.P. Morgan would consider expanding the suite for use in other Latin American countries. “Brazil accounts for 80% of flow in Latin America today, but we expect demand to pick up in other markets in the not-too-distant future, and we intend to be ready for that,” he said.