Portware Integrates Markit TCA01.06.2015
Markit, a provider of financial information services, is collaborating with trading systems provider Portware to bring point-of-trade analytics to buy-side institutions. The companies are integrating Markit TCA, Markit’s pre- and post-trade transaction cost analysis platform, into Portware’s execution management system in order to deliver TCA seamlessly within the trader’s workflow.
“What it entails is being able to provide a customized solution in a collaboration between Portware, ourselves, and the buy-side institutions that want to use both products,” Henry Yegerman, TCA product specialist at Markit, told Markets Media. “Every large buy-side institution has a highly customized workflow and what’s necessary to help them reduce those marginal basis points of trading cost is a highly collaborative, consultative effort among the three of us. It’s all part of our general view of building a trading services community.”
One of the major issues confronting buy-side trading desks is how to generate additional basis points of performance, either by getting some sort of short-term alpha or by reducing costs. There are a number of techniques that can be used to achieve this. One is by providing the buy-side with tools to help manage their brokers proactively.
“That means understanding how each broker’s product or strategy can be best to capture those few additional basis points by identifying and implementing workflow and process improvements, Yegerman said.
Portware and Markit will develop trading workflows that integrate point-of-trade analytics information for liquidity management and optimal trade execution within the Portware platform.
“The buy side’s growing need for cost and performance controls requires custom technology solutions as complexity in market structure increases,” said Alfred Eskandar, CEO of Portware, in a statement. “The ability to have at-trade analytics is crucial as firms seek to minimize transaction costs and enhance performance of their executions and this gives them access to an independent global analysis platform.”
Information-rich content and metrics embedded within Markit TCA can provide signals to traders as to what’s going on in the market and how they can actually use those signals to manage costs more optimally, according to Yegerman.
“They are able to then get those signals integrated entirely within their trading platform and their trading blotter,” he said. “They will be able to click and identify a single stock or the list of stocks in their Portware trading blotter, and understand how they might want to change or modify their trading strategy during the life of the order to get better results.”
Markit TCA delivers metrics to streamline performance-based order routing and optimal trade strategy selection, according to a company release. It combines comprehensive historical trading performance metrics with up-to-date forecasts and directional signals.
“We think that there’s an opportunity here to be a helpful intermediary between the buy side and the sell side in areas like best execution, because Best Ex will be a perennial challenge as market structure continually evolves,” Yegerman said of the Portware-Markit partnership.
Separately, Markit is developing a system to improve execution performance for buy-side traders.
Trader Dashboard will exploit the use of trading signals delivered to buy-side traders enabling them to ingest data, including TCA analytics, for making trading decisions. The system will know which securities are relevant to the client, based on the integration with the client’s trading blotter, use of FIX message tags, and IOI data. As a result, it will have the ability to deliver timely signals that drive better trading decisions, according to the company.
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