High-frequency trading strategies remain a key concern for equity investors. In a recent Liquidnet survey, 76 percent of respondents still believe that HFT strategies negatively impact some of their orders and 88 percent are concerned about predatory traders in dark pools. In this gallery of Traders Algo Updates, we look at the recent breed of algorithms and what they offer traders. HFT firms be forewarned: many new algos take aim at predators you claim are not hiding in your dark pools.
Predators beware -- Cowen's algorithm is designed to stymie your intentions of disrupting block trades, front-running and thwarting best execution. A venue-neutral provider of electronic trading solutions, Cowen added the CLEAN SEEK algorithm as clients have demanded more electronic protection from those market participants who take advantage of the current market structure.
"We designed CLEAN SEEK to help institutional customers generate alpha and combat interacting with potential predatory market participants within dark pools on their low alpha or low urgency to trade orders," said John Cosenza, co-head of the Cowen / ATM group.
"As the marketplace moves to greater transparency, it is important for traders to capture the value of increased visibility and better information within the electronic products they use. Our CLEAN SEEK product represents both the option and optimization of 'quality over quantity.'"
The $5.4 trillion currency market is going electronic -- and Pragma is getting in the game now with its own algorithms targeting the $2 trillion spot market. Its formulas target traditional buysiders, banks, hedge funds, regional banks and their brokers -- all of whom are increasingly trading in the foreign exchange markets to either generate alpha, hedge corporate exposure or fund equity/debt positions.
