[ M A R K E T
technology in the execution world,
with providers increasing the range
of algorithms being offered, there
are potential negatives to this.
BNY Mellon’s Pershing uses six or
seven different algorithm provid-
ers right now. The company has
not jettisoned anyone because of
weak algorithms. On the contrary,
says Horan, he is happy with the
algorithms provided the company
and, indeed, says there is a danger
of things becoming unnecessarily
complicated these days.
“There is only so much maximum
performance you can extract,” says
Horan. “There does seem to be an
arms race on in algos. Some firms
will give you an algo rack with 25 al-
R E V I E W
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A L G O S ]
making it harder to measure algo-
rithms against each other.
Algorithmic development is un-
“It is hard for any algo to adjust where liquidity
follows an episodic or erratic pattern.”
MICHAEL HORAN, HEAD OF TRADING SERVICES, BNY MELLON PERSHING
gos on which is way too confusing.”
Some have, indeed, criticised
things like intelligent switching
techniques which can potentially
deviate from the original execution
objective of a broker as well as
likely to stop any time soon to deal
with the new market complexities
fuelling the arms race further. It is
a fast-developing environment and
one that requires all measures to
stay on top.
Issue 52
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