Next up in our introduction to the distinguished nominees for the Leaders in Trading 2023 Editors’ Choice Awards, we bring you the shortlist the Best Broker Electronic Trading Initiative.
As another new category to the 2023 Leaders in Trading awards gala, this award is intended to celebrate those sell-side institutions committed to expanding their electronic trading offerings to aid clients and remain innovative.
Among the key players in this competitive landscape, The TRADE has deemed Goldman Sachs, Jefferies, JP Morgan and TD Cowen the top performers for the 2023 shortlist.
Goldman Sachs
Goldman Sachs Electronic Trading (GSET) has undergone a makeover in the last 12 months, designed to streamline its operations and expand its algorithmic client offering. Around 72% of what Goldman trades per day in notional is now accounted for by the low touch channel with the roughly 28% left accounted for by high touch and program trading.
In light of the evolving demands of its client base, the Goldman Sachs team has been expanding the remit of its low touch capabilities including the building out of its suite of algorithms on its new proprietary equity trading platform, Atlas. Throughout 2023, the bank has been migrating its algos onto Atlas including its new liquidity seeking algo, Sonar, a dark liquidity seeking algo, Sonar Dark and VWAP. The rest of its algo suite are derivatives of these three. Embedded in its Sonar strategy is a new Dynamic Close Scaling perimeter designed to capture more liquidity in the closing auction and DTC Stealth – a new solution aimed at internalising orders before they touch the street.
“GS’s desire to help clients improve their trading performance at the parent order level across all trading channels (high touch, program trading and low touch) was a core reason why we kicked off a multi-year, global >$100mm USD investment into our trading stack three years ago. Everything has been built from the ground up, giving us the enormous scale and flexibility needed to operate in the trading landscape we see today,” the bank told The TRADE.
Jefferies
Jefferies Electronic Trading (JET) offers algorithmic strategies and program trading across Europe, the US and Asia. The broker offers a platform with algorithmic access spanning 45 countries and over 100 liquidity destinations globally. Jefferies offers its clients a full suite of liquidity seeking and benchmark tracking algorithms, both through client integration and via FIX architecture to OEMS providers.
Alongside the firm’s liquidity seeking, next generation, auction and listed based algorithms, Jefferies offers its clients workflow solutions allowing them to switch between strategies or utilise tiered strategies, and a suite of customisable algorithmic strategies across VWAP, TWAP and others. It’s constantly working with its buy-side clients to develop and tailor new strategies to meet their needs including continuously developing its growing algo wheel offering, creating new strategies around the close in light of the market’s shift to the final portion of the trading day and new tools for order aggregation amid industry consolidation.
It has previously been ranked number one US electronic trading product and service quality provider and number one most helpful execution broker during the covid-related market crisis by Coalition Greenwich. Jefferies won the Algorithmic Trading Best Customer Support & Consulting at the Leaders in Trading Awards 2019.
JP Morgan
JP Morgan moved to expand its rates algo franchise to support the market’s wider electronification of rates trading – which has historically had limited algo usage and instead favoured risk transfer via RFS and RFQ for pricing and execution – in May.
As part of the expansion, JP Morgan now offers a complete set of algo order types available in rates across time, limit and market. The offering is available via the bank’s single dealer platform, Execute, and via API, with plans to get the offering live with FlexTrade and Tradeweb in the future. The bank launched its existing TWAP rates and adaptive algos last year. Both use JP Morgan’s internalised liquidity pool.
Alongside the expansion, JP Morgan also became the first dealer to go live on Bloomberg for automated US treasuries algo execution, meaning clients can now place an order on the platform and executions are streamed back for clients in real time with electronic trade booking once the order is done. The move meant the bank’s rates algo offering became equal to its long-standing FX algos offering in terms of analysis and tools available.
“Algos help clients manage costs, efficiently access liquidity and are an important utility in the toolkit given the current market environment. Other benefits include the time savings associated with the automation of workflows, the ability to access multiple different sources of liquidity, and the availability of pre- and post-trade analytics,” Chi Nzelu, head of FICC eTrading, JP Morgan, told The TRADE at the time of the announcement.
JP Morgan won the Algorithmic Trading Best Provider – Multi-User Clients Award at Leaders in Trading 2022.
TD Cowen
Despite the industry challenges posed by consolidation and declining market volumes, TD Cowen’s European electronic trading team has gone from strength to strength in the last 12 months. In a time when many are making difficult decisions around downsizing, TD Cowen has expanded its European electronic trading business, continuing to hire talent to reinforce its team to meet growing demand from clients under the leadership of Tom Campbell.
Since its launch in 2020, TD Cowen’s equities market share has continued to grow in the European market. Recent developments have further accelerated the firm’s progress, including its acquisition by The Toronto-Dominion Bank for $1.3 billion. “This strategic move provided a springboard for further growth, opening new opportunities and strengthening its market presence,” Cowen told The TRADE.
“At the heart of TD Cowen’s success lies a commitment to best-in-class client coverage. Its thoughtful liquidity interaction and market-leading dark liquidity seeking algorithms enable the team to not only stay ahead of the competition but also manage costs more effectively for clients. Its agility and adaptability to client needs in algo trading is truly exceptional, exemplified by its ability to swiftly implement changes intraday (or where necessary overnight) — a feat that larger institutions struggle to match.”