How Machine Learning is revolutionising Transaction Cost Analysis?
Analytics is not just about showing the performance of a trade. It is also about providing traders with tools to improve a future trade, based on the TCA outcome.
The failing of modern TCA systems is not that the analytics themselves are lacking. Industry standard TCA provides a range of critical information and feedback to traders for analysing liquidity, brokers, executions, algos and every aspect of their workflows.
The issue is, that the Sell-Side EMS / OMS solutions are so complex and market conditions so variable, that the translation of a TCA report into a meaningful action is often not much more than an educated guess by a trader, already under pressure from a variety of different forces.
What the analytics are lacking, is real-time access to transparent insights on the impact of market conditions and trading behaviour.
Quod Financial TCA / Analytics product not only offers the common benchmark and analysis capabilities, along with customisable dashboards and reports, but critically, it creates a real-time loop between the TCA outcomes and the pre-trade automation available within the platform.
As trade performance is measured, the information is fed into AI/ML pre-trade strategy selection and parameter configuration. This allows recommendations to be provided to traders in real-time, to suggest possible settings and outcomes for future trades. It is the evolution of:
Transaction Cost Analysis → to → Transaction Cost Automation
About Quod Financial
Quod Financial is a multi-asset OMS/EMS trading technology provider focused on automation and innovation – specialising in software and services such as Algorithmic Trading, Smart Order Routing (SOR), and Internalisation of Liquidity. Quod leverages the use of its data-driven architecture to support the demands of e-trading markets by combining AI/ML-enabled decision-making tools and dynamic market access with a non-disruptive approach to deployment. For more information visit: www.quodfinancial.com
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