EdgeTrade introduces private-label algorithmic trading service

Source: EdgeTrade

EdgeTrade, agency broker and developer of algorithmic strategies and direct market access (DMA) software utilized by institutional buy-side and sell-side firms in North America and Europe, today announced the unveiling of Algos Plus, an outsourcing service that enables broker-dealers to private label EdgeTrade's algorithms.

Algos Plus is expected to give a competitive boost to those broker-dealers lacking resources to develop sophisticated algorithmic trading tools for their buy-side clients. Sell-side customers of Algos Plus also have the option of executing algorithmic orders through their own market connections or utilizing EdgeTrade's lines. Buy-side clients of participating Algos Plus brokers will never be revealed to EdgeTrade. Clients of EdgeTrade include hedge funds, mutual funds, asset management firms and broker-dealers.

"Sell-side firms are looking for a partner to not only provide a service such as the one we're announcing, but to back it up with dedicated training, support, customization and the flexibility to use their own lines when executing orders; hence the name Algos Plus," said EdgeTrade CEO, Joseph Wald. "Other brokers providing algorithms to sell-side firms will not permit them to use their own lines when executing trades; we will. EdgeTrade has no conflicts. We do not conduct principal or proprietary trading and serve only one constituency: our clients." Algos Plus complements EdgeTrade's overarching mission of empowering traders, both buy-side and sell-side, through uncompromised agency execution services that deliver speed and quality of execution, coupled with trading technology that is best-of-breed.

Wald further explained sell-side interest in Algos Plus as twofold: brokers can create greater distinction and value-added services in an increasingly competitive environment by giving their buy-side clients a selection of sophisticated algorithms. "Buy-side clients no longer have to resort to sending orders to algorithmic strategies provided by other brokers that could result in information leakage," said Wald. Also, a broker participating in Algos Plus can execute through EdgeTrade though it is not a requirement. "This is a big deal for a broker who does not want their buy-side client to necessarily execute an algorithmic order through another broker. Sell-side firms can take advantage of our algorithms and get credit for being the executing broker." Clients of participating Algos Plus sell-side firms can access the private label algorithms through their broker's front-end or via a buy-side firm's own trading or order management system. Identities of buy-side firms are protected and unknown to EdgeTrade.

Through Algos Plus, sell-side firms can private label any individual or combination of EdgeTrade algorithms. "To sell-side firms we're saying: call our algorithms your own, and process order flow as you normally would," said EdgeTrade President, Kyle Zasky. Recent industry research indicates a dearth of knowledge or understanding of algorithmic trading among buy-side firms and even sell-side participants. "EdgeTrade can close that learning curve for sell-side firms that want to use Algos Plus, and we will train them on how to sell algorithmic trading to their clients," said Zasky.

EdgeTrade is gaining widespread recognition for its array of highly sophisticated algorithmic strategies, organically developed and customized for each client user by the firm's quantitative team. Through EdgeTrade's front-end trading system, institutional buy-side and sell-side traders place single stock and basket equity orders. The EdgeTrade trading system combines market data, multiple execution destinations, order management and risk management. Traders have the option of connecting to EdgeTrade via FIX (Financial Information eXchange) or through other trading and order management systems. EdgeTrade's algorithmic strategies and direct market access order types are currently integrated with major industry trading and order management systems.

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