EdgeTrade â the independent, agency-only broker and developer of algorithmic and direct access (DMA) software â today announced revealing, year-to-date performance figures for FAN, its smart order execution strategy launched in September 2006 that enables traders to âfind and nailâ best execution by sourcing liquidity among aggregated dark pools and public markets simultaneously. Clients of EdgeTrade, totaling more than 150 in North America and Europe, include hedge funds, mutual funds, asset management firms and broker-dealers.
TABB Group has estimated a 9% average match rate for orders across non-quoting venues, and maintains that dark pools and crossing networks have grabbed nearly 10% of the total equity market, a figure projected to reach 15% by 2010. FAN, in contrast, saw a 28.9 average daily (year-to-date) percentage of executions in the dark, with peak days hitting as much as 66%.
âFANâs singular differentiation in the industry and results are crystal clear,â said EdgeTrade CEO Joseph Wald. âTraders have a far better chance of increasing fill probability by leveraging smart order execution logic that fans orders out to multiple destinations, dark and public, in search of a match and best execution.â
EdgeTrade recently posted an on-line presentation of FAN to its home page, combining sound and motion to vividly depict its approach to finding best execution. FAN is emblematic of EdgeTradeâs grounded expertise in the marketâs ever changing microstructure.
âFAN is performing extremely well for two key reasons: itâs a robust aggregation system with an adaptive ability to continuously pinpoint where real time executions are occurring in the marketplace and change course in a microsecond,â said Wald. âThis proactive, dynamic hunt for liquidity â simultaneously scanning leading dark pools and public markets using historical and proprietary analytics â proves FANâs value proposition: smart order execution, a term coined by EdgeTrade in 2005, is the successor to smart order routing for optimally sourcing liquidity and best execution in todayâs fragmented marketplace.â Without dark books as destinations, smart order routingâs linear, passive approach means a less than likely potential fill rate, inferior execution and higher trade costs.
EdgeTrade is pioneering smart order execution strategies, its category breakthrough of next-generation algorithms, with FAN and Sumo. Launched in 2005, Sumo is an aggressive, time-sensitive strategy designed to get trades done quickly with little to no market impact and information leakage. Other key features of EdgeTradeâs agency-only algorithmic trading service include a growing roster of benchmark strategies: VWAP, TWAP, Liquidity Paced, Volume Tracker and 10b-18 (corporate buyback). EdgeTradeâs algorithms are available through Execution Management Systemâ¢, the firmâs independent, agency-only platform for single stock and basket equity orders, as well as a number of buy-side and sell-side trading and order management systems, including: Bloomberg, Charles River, ESP, Eze Castle, Fidessa, Longview (Linedata), Macgregor, Mixit, Moxy (Advent), Neovest, NYFIX, thinkorswim and Tradeware.
Internally developed and introduced by EdgeTrade to its institutional client base in 2002, EMSâ¢ offers high-speed connections to multiple execution venues, DMA order types, algorithmic trading strategies and low-latency market data. While a holistic offering, EMS is a modularly designed trading hub that gives traders what they want through customized screens. EMS runs on all Java-supported operating systems. Clients access the platform via the Internet, dedicated line, in-house order management/trading systems or through FIX.