As of February 2008, 286 brokerage firms, hedge funds and traditional long only investment managers in the US, UK and Far East, an increase of 118 firms in 12 months, have begun sending and receiving trade ideas using the TIL platform.
New participating firms in 2008 include Altium Capital Ltd. of London, a leading European investment banking group that also provides equity trading, sales and high quality institutional research; Goodbody Stockbrokers, Irelandâs longest established stock broking firm with roots dating back to 1877; and the Wachovia Securities unit of Wachovia Corporation of Charlotte, NC, one of the largest diversified financial services companies in the U.S.
TIL was founded in 2005 by Citigroup, Credit Suisse, Dresdner Kleinwort and Merrill Lynch to encourage the use of trade ideas as a value-added brokerage service. To facilitate this, TIL created a data center (the Repository and Distribution Centre, or RDC) for the secure transmission and storage of ideas between participating firms.
Trade ideas help the buy side put sell side research into action. They are very client specific recommendations, developed by institutional sales people, that suggest what stocks to buy long or sell short, how much money to invest, how to build the position, when to close it, and the rationale.
âAs opposed to traditional research reports, trade ideas are calls to action,â said Simon Tizard, the TILâs Executive Director. âBuy side firms that use trade ideas allocate 25% or more of their commissions to the brokerage firms who develop ideas for them.â
TIL also reported that 11,921 new ideas were entered into the RDC in February 2008, up 108% from a year ago, for a total of 124,143 open and closed ideas, almost quadruple that of a year ago.
âThis is the largest database of institutional brokersâ trade ideas and the performance of those ideas in the industry,â said Colin Berthoud, Director of youDevise Limited, which markets the Trade Idea Monitor (the TIM).