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“ There ' s often that initial resistance but we ’ re moving to a place where traders are now , for the most part , much more engaged with [ TCA ].”
PAUL SQUIRES , HEAD OF TRADING , EMEA AND APAC EQUITIES AT INVESCO
they ’ re looking at and ensure that it is reliable and robust .
Adding to that , performance can be improved overtime by using post-trade analysis and plugging that back in at a pre-trade level , which can then potentially shift decision making and trading processes .
“ As a TCA vendor , we can provide best-in-class proprietary metrics , but it all comes down to how the firms are using the data . TCA and trading analytics are at their most powerful when the output is used in a way to actually tell a clear story ,” emphasises Richter .
“ TCA was built in the first instance to provide users with benchmark measurement of their trading activity and to provide actionable insight into their trading , the compliance use case was always secondary .”
As much as TCA can provide valuable insights to make data analytics more actionable for traders , Invesco ’ s Squires reveals a much more practical level in which TCA can be used , particularly in a managerial position .
“ If you put data in front of a trader and say , without any agenda , without any bias , your trading data looks a little bit better / worse this month than last - whether those results are authentic and representative or not , what you will get is a response ,” he says .
“ The benefit of TCA is not from forensically analysing the data - and there is an argument that we have become perhaps a bit too forensic about it - but simply the fact that it creates a discussion with your traders about their performance and why they have behaved in certain ways .” more meaningful insights and accurate evaluation . More mature asset classes such as equities tend to be able to extract the most value from TCA , but increasingly other asset classes are becoming more advanced in their use of data and analytics in parallel with increased electronification and on-venue trading in some markets .
Equity TCA is the most robust out of all the asset classes because it has the most market data associated with it , argues Northern Trust ’ s Bryan . “ The other asset classes are more challenging because there is less data available for the comparison ,” she says .
Generally speaking , it can be argued that if you ’ re trading algorithmically or trading on-
Usage depending on asset classes TCA varies across asset classes due to differences in market structure , liquidity and execution dynamics , requiring tailored methodologies and metrics for
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