Adaptive Smart Order Router 

Smart Order Routing (SOR)

The role of the Adaptive SOR is to successfully execute a chosen strategy, using real-time data driven intelligence for achieving the best possible outcome in one or multiple markets. In a highly fragmented and fast/dynamic marketplace, the Adaptive Smart Order Router is a crucial component of each execution.

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Your complete Multi-Asset SOR solution

With over 14 years of experience, Quod Financial offers the most powerful and customisable Smart Order Routing solution available in the market in Americas, Europe, Middle-East and Asia. Quod's Lit/Dark Smart Order Router uses real-time data including AI/ML analysis of markets to take microsecond based execution decisions. Our SOR can be configured using a real-time web interface that allows for highly customised strategies using 450+ parameters.

Contact us to understand how our clients have gained control of their trading and gained immediate execution performance improvements.

Features and Benefits

What you get with Quod SOR

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Easy Configurations

Our implementation of machine learning (ML) introduces real-time recommendations to our clients. With over 400+ configurable parameters in our SOR, our automated feedback helps clients know how to achieve the best results in real-time.
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Unrivaled Order Management Rules

Our order rules functionality allows any inbound orders to be categorised and acted on automatically based on predefined and configurable criteria. Example rules include, routing by instrument, client, specific algo, DMA, or high-touch process.
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Intelligent Behaviour

Smart statistics are implemented to add intelligence to the SOR decision making process. It integrates external statistics, but more importantly compiles the execution data over time. The data set includes the probability of execution in dark and lit, and the venue’s past performance for a given time to find passive liquidity.
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Powerful Best Execution Package

Our SOR leverages our powerful best execution and TCA package, which intuitively presents performance on an order-by-order or overview basis. Traders can show their clients the quality of execution as well as quickly learn, from up to 10 years of trading history, how to improve performance against benchmarks.

Best Execution, Compliance
and Strategic Execution

Quod provides powerful Best Execution reporting to give specific details on every step of the execution decision process. This includes market conditions at the time of the event, a decision-by-decision breakdown and an attached benchmark to measure execution performance. This provides essential tools for regulatory compliance as well as crucial information to clients and traders.

To achieve optimal execution performance and profitability, it is crucial to have access to high-quality data and intelligence to continually evaluate your execution strategies. This involves conducting detailed analyses, such as reviewing venue performance and assessing trading costs (or spread capture). The same data is then reused by the algorithms in order to improve performance over time.

Product In Action

What are the Technological Capabilities of the SOR Solution

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Multi-asset SOR: Equities, Derivatives and FX, with asset-class specific implementation to manage liquidity, order/quoting types, and phase management (auction to continuous trading).

Orders are held away from the markets and can be placed or modified without revealing any strategies or patterns to individual venues. Different rounds of liquidity seeking (e.g. Aggressive phase followed by passive phase).

Fast decisions ensure the best possible outcomes. Combines strategies together (including Quod Algos or Broker Algos) to evolve execution during the lifecycle of an order.
Provides a supervision front-end to manage exceptions (i.e. Rejects, abnormal orders etc); a self-administration front-end to manage the SOR algorithms, and immediate availability to the SOR algorithm.
Prevents over-executions and run-away algorithms: offers different levels of risk management to prevent over-fills, as well as multi-level and global Kill switch and Circuit breakers to manage run-away algorithms (as increasingly demanded by regulators).
Internalises client order flow through internal market making and seeks out non-transparent liquidity.
Example

SOR Variables and Configurations

  • Price
  • Cost
  • Broker /venues preferences (and forbidden venues)
  • Hit Ratios
  • Volatility
  • Probability of execution
  • Latencies
  • Venue limits (for FX)
  • Position (for derivatives)
  • Last Look aware
  • Liquidity hunting (for ghost liquidity)
  • Level of Market Depth
  • Rejection Rates
  • Market Impact
  • Transaction Costs
  • Internalisation (executing simultaneously on internal and public)

Data Sources and Connectivity:

With an estimated 80-plus trading venues in Europe and the US alone, fragments of liquidity are everywhere. This is where conventional order management and simplistic routing systems falter – and our Adaptive SOR makes the difference.

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Advanced Order Routing Logic:

Our SOR consolidates transparent liquidity in different venues giving you a clear view of the markets. But it goes further, to seek out non-transparent liquidity residing in algorithms, such as Iceberg orders, or dark venues. The result is the ability to dynamically make new execution decisions as market conditions evolve during the lifecycle of an order.

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Transparency and Control:

There’s no point finding liquidity if you can’t grab it. And once captured, there’s the danger of over-execution that you must manage. Our Adaptive SOR has in-built mechanisms to mitigate risk of the over-execution and algorithms to seek out only the real liquidity in the market, instead of chasing ghost liquidity.
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Algorithmic Trading

Automate your Low-Touch trades by providing traders with tools for best execution. Utilise the advantage of algorithmic trading and backtest your trading activity. With Quod, you can gain control over transaction costs and maintain speed and accuracy of your trades.
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