UBS has launched two new algorithms in Europe and the US called Tap and TapNow, the brokerage firm announced yesterday.
Tap and TapNow are the firm’s “most agile algorithms yet,” says UBS. They are self-adapting algorithms that aim to access all sources of liquidity including the UBS Price Improvement Network (UBS PIN), dark pools, ATSs, ECNs and exchanges, enabling their users to benefit from market fragmentation.
Tap actively seeks liquidity in the market while minimising price impact by taking full advantage of UBS’ crossing capabilities and rarely putting shares out on the order book, notes the firm. It “opportunistically seizes liquidity as it arises,” remarks UBS.
An optional parameter called Completion Price is also available to enhance Tap. Completion Price enables traders to specify the price at which they want an order to be completed if the opportunity arises. This allows the algorithmic strategy to override any volume limit, according to UBS.
TapNow is designed for immediate execution. It seeks out liquidity aggressively, both in the open market and through UBS’ crossing network. It attempts to complete orders rapidly at or around current market prices while monitoring its footprint in the marketplace.
If users require an order to be completed rapidly below a certain price, they can set a price limit. The algorithm attempts to take advantage of all available liquidity and complete the order within the price limit specified.