GETCO Adds Algos for Trading Across Venues
October 17, 2012
Market maker Getco is adding two new algorithms to its stable of electronic trading tools, expanding its GETAlpha electronic trading offerings to six. Other new algos are also coming in the next few months, Getco officials told Traders Magazine.
Both the new and existing algorithms are designed for more effective multiple venue institutional trading. The algos are designed for faster trading, including better daily and minute-by-minute performance, according to Getco.
The market maker looks to leverage its position as a market maker and create what it terms, ?micro-alpha? in every trade. By being able to either buy and the bid or sell at the offer, the algos help clients capture more of the spread, said Chris Amorello, head of institutional sales at Getco.
The number one issue we hear from institutional investors is a growing concern that their trades are not being managed with the level of care and attention they historically received, Amorello said.
The two new algos are implementation shortfall and percentage of volume. They join the firm's other existing tools such as volume-weighted average price, time-weighted average price, Optimal Alpha and the Opportunistic Algorithm.
The Optimal Alpha algo uses a proprietary index that calculates the cost of liquidity at various times during a trading day. Clients, Getco officials said, use this algo to more effectively schedule trades.
The Opportunistic Algorithm was the firm's first algo, launched in June 2011. Traders use it to passively post liquidity. So they act as a one-sided market maker. This allows for the majority of a customer?s order to be executed without crossing the spread.
And the market maker has more algorithms on tap. Amorello said the firm is beta testing a more aggressive liquidity seeking tool which should be released within the next month. He declined to provide further details.
"We are sequentially adding new product offerings and looking to leverage our position as a market maker to help clients capture the whole spread more consistently," he said.
All GETAlpha strategies are customizable to take into account the unique nature of each of our clients' trading needs. They are also designed to provide customers with associated rebates or fees that may be derived from trade executions.
All algorithms are also available via order management system vendors or direct connection. GETCO has also formed an exclusive partnership with Mismi, providing NYSE floor brokers access to the GETAlpha products through their handheld trading devices.
John D'Antona writes for Traders Magazine.