Market data solutions provider Vhayu Technologies has launched Velocity TCA, a real-time transaction cost analysis (TCA) tool for the buy-side. The service gives traders instantaneous feedback on trades sent from any FIX-compliant execution or order management system, and provides them with multiple benchmarks to measure and analyse trading performance.
Vhayu has licensed iServer, an application from trading and FIX technology firm EZX, which essentially mirrors the activity of the client’s order or execution management system. Every time an order is executed, a copy is sent via FIX to Velocity TCA for analysis.
According to John Coulter, vice president, corporate strategy, Vhayu, the product will help free the buy-side from dependence on sell-side TCA solutions to analyse both broker and algorithmic performance. “We have got a lot of feedback from the buy-side that said, ‘If we had more control of the data and the analytics, we would have a lot more trust for the algorithms that we are running through our trading systems,’” he said.
The real-time element of the service will also help traders to identify and correct any potentially costly mistakes before the end of the trading day. “If you have the capability to catch a strategy that is going south mid-stream and either work the order manually or switch to another strategy, that could be a life-saver,” said Coulter.
Velocity TCA’s transaction cost analysis component combines market data, proprietary data and order/execution data to deliver real-time, intra-day or end-of-day analytics. Customers can use the provided analytics or develop custom benchmarks.
The product would be particularly well-suited to traditional long-only asset managers, said Coulter, because their overall performance tends to be more attached to the performance of the trading operation. He suggests hedge funds may also find the service useful to determine which brokers are providing the best service.
“With the collapse of a lot of prime brokers, hedge funds are going to start spreading out the prime brokers’ responsibilities,” he said. “In order to see who is giving them the best service, real-time TCA would be a critical component of that.”
As well as the TCA functionality and the iServer technology, Velocity TCA incorporates market data management, which captures any real-time data feed and analyses it, and pre-trade analysis, which offers 80 customisable analytics.