Shanny Basar – The study said firms were using machine learning in cases ranging from equity trading to optimize order-routing and deal execution to anti-money laundering where the technology is used to analyse millions of documents for ‘know-your-customer’ checks. Insurance and banking had the most live cases in the sample with the median bank having 5.5 machine learning applications.
Greenwich Associates report – With 44% already using AI and another 17% reporting plans to implement it in trading in the next 12 to 24 months, a solid majority of market participants — including buy-side institutions, sell-side firms, exchanges, and others — soon will be using AI in the securities trading process.
Larry Tabb – It is certainly not a good idea to only route orders to markets that pay the highest rebate or charge the lowest fee, but this is difficult to regulate. Firms are generally governed by best-execution policy, which in the US focuses on obtaining a price for the client order that is at, or better than, the best bid or offer in the market.
Larry Tabb – Algo wheels help buy-side firms automate their algorithmic workflow and rationalize their usage of broker algorithms. The wheel not only simplifies the difficulty of allocating order flow to a specific broker, it also helps the buy-side trader ascertain the quality of the broker’s algos given differing liquidity patterns and trading situations. … When used for best execution a broker wheel pits similar algorithms against each other using A/B-type testing strategies. … Normalizing disparate algorithms to measure performance and ensure best execution are the algo wheel’s killer application. … But algo wheels don’t guarantee best execution by themselves. … As algo wheels gain traction, TABB Group sees buy-side firms supporting two different types of tools. The first set includes more generic algorithms that fit into an algo wheel, which will be used for more traditional VWAP, TWAP, IS, or dark accumulation strategies; and the second set contains those more customized algos that will be tailored to specific situations. … Increasingly, the buy-side trader’s job will be focused on ascertaining the appropriateness of using a wheel, and those times when a more specific and customized tool will provide a better outcome.
Dan DeFrancesco – With Cash Management, uninvested cash will be moved to program banks, which will offer insurance from the Federal Deposit Insurance Corp.
Aziz Abdel-Qader – Chicago-based Trading Technologies International, Inc. (TT) is now offering connectivity to the Johannesburg Stock Exchange (JSE), the largest stock exchange in Africa, via its TT® platform.