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AdminApr, 25 20193 min read

Reinventing the (Algo) Wheel

In a continuing effort to help our clients improve work flows and deliver on the promise of best execution, SS&C Eze is proud to introduce the Eze EMS Algo Wheel – the order routing tool designed to improve trade automation and deliver on the promise of best execution for buy-side traders. New and existing clients alike can access the Eze Algo Wheel seamlessly within Eze EMS (formerly RealTick).

Unlike other algo wheels in the market, the Eze EMS Algo wheel offers both rotation and probability weighted algorithms, and can be augmented with in-depth trade analysis from Trade Informatics. The integration is designed to help traders fine-tune their strategy and optimize the trading workflow.

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What is an Algo Wheel?

On any given day, traders may have hundreds of different orders come across their desk. A large portion of those trades may be small, routine procedures, while the rest require careful attention and consideration. Algo wheels are tools that allow traders to automate routines for smaller, less impactful orders and focus their human capital on the harder-to-execute trades.

Initially conceived to help traders comply with advancing best execution regulation, algo wheels’ utility has been repurposed and expanded to help traders boost their productivity. This result is achieved primarily by better trade automation, broker rotation, and systematic post-trade analysis.

The Eze EMS Algo Wheel allows traders to shift their focus to those complex trades by automating everything else. Using decision logic programmed in advance, the wheel selects brokers and routes orders automatically based on whichever implementation strategy has been agreed upon. For basic transactions, the EMS Algo Wheel allows traders to achieve an unparalleled level of efficiency in their daily workflow. And with the extra time saved from not having to hand-hold routine orders, traders can take a more active role in mitigating the risks of more demanding transactions. 

Use the Algo Wheel to Eliminate Bias 

The Eze EMS Algo Wheel allows buy-side traders to rotate broker selection based on evaluation of specified criteria.

Wheels can be categorized by strategy, meaning traders can fine-tune their performance by selecting the appropriate algorithm, like VWAP, POV, or IS, on any given trade. From there, the broker selection process may be automated within the Eze EMS Algo Wheel based on prior performance. This whole process not only benefits the trader’s P&L, but also helps eliminate bias.

Better Post-Trade Analysis To Fine-Tune Your Strategy

A critical differentiator of the Eze EMS Algo Wheel is the quality of available post-trade data. Ongoing algorithm refinement, fueled by accurate post-trade evaluation, is crucial for optimization. To deliver the very best in this arena, SS&C Eze has deepened its long-time partnership with Trade Informatics to provide neutral third-party analysis.

Every trade is tracked from start to finish across each of the relevant investment agents, meaning the Eze EMS Algo Wheel can evaluate trades from the portfolio manager all the way to the source of liquidity, and every step in between. This means the entire investment operation is armed with better data to improve execution.

Each trade executed by the Eze EMS Algo Wheel may be reviewed in a single, standardized Report Card, generated by Trade Informatics, which examines the trade from the perspectives of all investment agents. The Report Card takes into account order flow characteristics and contemporaneous market conditions when evaluating strategy decisions and broker executions. Instead of receiving a non-standardized post-trade analysis from every broker used, the Report Card offers a neutral, third-party analysis of the trade’s execution, and highlights the implementation shortfall from both the trader’s and broker’s perspectives.

Gone are the days of multiple, unwieldy reports. A new era is on the way: one with better transaction data, less slippage, and greater confidence in your execution strategy. 

To find out more about Eze EMS Algo Wheel, click here.

 

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