Trading technology provider Fidessa has launched BlueBox Execution Strategies in the US, a suite of algorithms designed to allow users to access both dark pools and displayed markets. The algorithms, which support short-term trading tactics, are available to the sell-side through the Fidessa trading platform in the US. The company is also planning to introduce the new algorithms in Europe in the latter part of 2008, and is considering rolling them out in Asia.
One of the main selling points of the new suite is its ability to automate more complex trading strategies, according to Matthew Rowley, global product manager for advanced trading products at Fidessa. “Earlier algorithms were more about achieving certain benchmarks, such as VWAP,” he told theTRADEnews.com. “The new generation of algorithms coming out now are less commoditised and allow traders to automate more of their short-term tactics.”
There are four new algorithms in the new suite. Spotlight is a dark pool and visible market aggregation algorithm. Pounce uses a technical pricing model to take advantages of market opportunities. Ladder allows users to peg multiple price points within the market. And Midmax is designed to achieve price improvement by exploiting passive and aggressive trading strategies.
Fidessa has also expanded its existing suite of standard BlueBox algorithms with Dark Arrival, an algorithm designed to control access to dark pools of liquidity.
The new algorithms were developed in part to help clients take advantage of the growing trend for executing trades in dark pools of liquidity. “Our customers are becoming increasingly focused on dark pools,” says Rowley. “We have been working with them to develop something that is more multi-faceted, incorporating dark liquidity across all aspects of their business.”
The new algos were also designed to help clients navigate the increasingly complex and fragmented US trading environment. There are now more than 40 execution venues in the US. “Liquidity was always in a handful of the larger dark pools, but it is starting to move around to others,” says Martin Hakker, executive vice president of marketing at Fidessa. “It is really about looking for automation to better access all of them in an efficient manner.”
Fidessa has also noted the increasing fragmentation in markets such as Europe and Asia. In keeping with this, it is planning to introduce its new algorithmic suite to these markets. “We will be launching these Execution Strategies algorithms in Europe in the latter part of this year to meet demand,” says Hakker. “Following the US and Europe we would see Execution Strategies being rolled out to Asia.”
As well as rolling out BlueBox Execution Strategies to new markets, Fidessa is also developing more new algorithms. “We are already starting work on multi-legged pairs algorithms in the US. That’s over the next few months,” says Rowley. “After that we will work on list algorithms. These are basket level algorithms using the correlative effects of each order.” Following this, the company is also planning on developing algorithms for derivatives.