The new algorithms, offered as part of UNXâs next-generation Algorithmic Market Access technology, give clients an unprecedented level of customization and flexibility in the way they execute trades. By combining sophisticated algorithmic trading strategies with UNXâs tactical execution framework, clients can utilize market-proven strategies alongside the financial industryâs leading trading technology to execute their trades and minimize their footprint in the market.
âThe most successful traders are those who experiment with a variety of tactics, incorporate feedback from the market and adjust their strategies.
That is exactly what we have done with these new algorithms,â said Scott Harrison, CEO of UNX.
The new algorithms offer clients a level of flexibility and customization that exists nowhere else in the market today. After clients have chosen an algorithm, UNX can customize the tactical execution framework for that algorithm that best meets their needs. âThese are some of the most popular performance-driven and liquidity-seeking order agents that we have developed,â Mr. Harrison added. âBy working with clients to select the best executional building blocks for each strategy, and to determine the level of aggressiveness and visibility for their trades, weâre offering extremely sophisticated trading strategies, in an easy-to-access package that is tailored to meet clientsâ specific needs.â
The first five algorithms that incorporate UNXâs most popular and effective execution strategies are:
- UNX VOLUME PARTICIPATION â Created to be used with any size stock, this algorithm allows clients to trade a particular amount of volume for a stock during any given timeframe. Like all of UNXâs algorithms, the Volume Participation algorithm is underpinned by UNXâs tactical execution fabric, which enables clients to select the level of aggressiveness or visibility in the market for each trade. This strategy can be tailored to meet clientsâ
- UNX ECLIPSE: Hidden Order Algorithm â Designed to be used across a range of security types, from liquid large caps to smaller thinly traded issues, where displaying an order is not desired. The cornerstone of this algorithm is the attempt to remain relatively undetectable no matter the trading style of the particular stock to which it is applied. The aggressiveness of the algorithm can be modified to choose how deliberately an order should seek price improvement (even if it sacrifices execution probability) relative to the NBBO when an order is trading within range of the ultimate limit.
- UNX ORBIT: Spin Order Algorithm â Designed to be used where regular, automatic probing for liquidity is desired. Orbit seeks to balance market exposure and passivity, while minimizing an orderâs footprint between liquidity checks. Additionally, this algorithm contains a component that tries to capture movement in the favor of the order with minimum impact on that movement. The aggressiveness parameter will determine how the order positions itself within the NBBO, even on market orders.
- UNX ATOM: Order Algorithm â Optimized to execute orders of less than 2500 shares, utilizing a blend of speed and automation, while minimizing price impact and the orderâs âfootprint.â This algorithm operates under the assumption that timely execution of orders in this size range is extremely important for marketable orders. It assumes that the objective of capturing the maximum number of prints on a more passive limit is paramount.
Ultimately, it provides clients with an extremely capable tool for routing and executing smaller sized orders via automatic application of UNXâs best tactical tools.
- UNX SMART â Designed to be an all purpose algorithm which selects the optimal execution solution for an order based on order size, stock liquidity and trade urgency.
Each algorithm can be used in combination with other algorithms and saved for future use. All of UNXâs algorithms can be customized on a case-by-case basis to match each clientâs specific needs. UNXâs transaction cost analysis service can analyze the execution quality of each algorithm, as well as its underlying components, for further refinement.
As with all of UNXâs services, these five new algorithms are available via UNXâs proprietary applications, third-party OMSs, and as a service bureau.