Instinet launches enhanced trading algorithms; connects to Level ATS

Source: Instinet

Instinet, a global securities firm and wholly-owned subsidiary of Nomura Holdings, Inc., today announced the launch of the Instinet Execution Experts, an enhanced suite of algorithms that incorporates best-of-breed components of Instinet's previous algorithmic offering with Nomura's former U.S. strategies.

"Over the past six months, our team has worked to identify the most advanced aspects of Instinet's and Nomura's U.S. algorithmic suites to create what we feel is a highly sophisticated product" said John Comerford, EVP, Global Head of Trading Research at Instinet. "Based on early client feedback, we believe we've successfully combined the dynamic behavior of Nomura's algorithms with Instinet's liquidity and market access capabilities, creating an offering that will help clients improve execution quality regardless of the size, complexity or liquidity constraints of a trade."

The first individual strategies to be developed within the Instinet Execution Experts framework are enhanced versions of NighthawkSM and CobraSM, previously Instinet-branded algorithms, and Portfolio IS, previously deployed at Nomura. Nighthawk, a dark liquidity aggregation algorithm, has seen the addition of several new venues, including LeveL ATS (see separate 4/14/08 press release). Cobra, which intelligently reduces market signaling and opportunistically accesses liquidity, now has the ability to access multiple dark pools in addition to ECNs and exchanges. Portfolio IS is an adaptive program-trading strategy that utilizes proprietary market impact and industry correlation models to balance market impact and opportunity cost while optimizing dark-pool interaction for higher-cost trades.

The Instinet Execution Experts are based on a unified, component-based framework where all algorithms have access to price and liquidity discovery strategies and dark pool aggregation technology. This common platform includes a full set of portfolio components that support implementation shortfall, cash balancing and residual risk strategies, and ensures that all algorithms have immediate access to new execution techniques and liquidity destinations as they are developed. Additionally, the architecture enables Instinet to quickly develop new algorithmic tools as the market evolves, customize individual client solutions and more easily modify strategies that have already been developed.

The Instinet Execution Experts are currently available to U.S. clients. A global version of the Experts is expected by the end of the year.

Separately, Instinet, a global securities firm and wholly-owned subsidiary of Nomura Holdings, Inc., today announced that its U.S. broker-dealer, Instinet, LLC, has connected to LeveL ATS. LeveL becomes the latest U.S. dark pool clients can access through any of the algorithms in the Instinet Execution Experts suite.

"Institutional clients continue to express dissatisfaction in dealing with the great number of dark liquidity pools now available. Based on this feedback, we have embraced a philosophy of openness throughout our organization by attempting to partner with all significant dark liquidity providers, which we believe is in both our clients' and the industry's best interests," said Michael Plunkett, President of Instinet, LLC.

"Instinet's high-speed order delivery is well-aligned to benefit from LeveL ATS's unique framework and growing liquidity pool," said Whit Conary, President of Level ATS. "Customers of LeveL, like Instinet, realize improved execution quality, anonymity for order handling, and a mechanism for enhanced, innovative and flexible order types."

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