Instinet launches enhanced algorithmic trading suite
Instinet, a provider of trading systems and services owned by Nomura Holdings, has launched Instinet Execution Experts, an enhanced suite of algorithms that incorporates components of the firm's previous algorithmic offering with Nomura's former US strategies.
'Over the past six months, our team has worked to identify the most advanced aspects of Instinet's and Nomura's US algorithmic suites to create what we feel is a highly sophisticated product,' says John Comerford, an executive vice-president and global head of trading research at Instinet.
'Based on early client feedback, we believe we've successfully combined the dynamic behaviour of Nomura's algorithms with Instinet's liquidity and market access capabilities, creating an offering that will help clients improve execution quality regardless of the size, complexity or liquidity constraints of a trade.'
The first individual strategies to be developed within the Instinet Execution Experts framework are enhanced versions of Nighthawk and Cobra, previously Instinet-branded algorithms, and Portfolio IS, previously deployed at Nomura. The strategies are currently available only to US clients, but a global version of the algorithm suite is expected by the end of the year.
Nighthawk, a dark liquidity aggregation algorithm, has seen the addition of several new venues, including LeveL ATS, while Cobra, which intelligently reduces market signalling and opportunistically accesses liquidity, now has the ability to access multiple dark pools in addition to electronic communication networks and exchanges.
Portfolio IS is an adaptive programme-trading strategy that utilises proprietary market impact and risk models to balance market impact and opportunity cost while optimising dark-pool interaction for higher-cost trades.
Instinet Execution Experts is based on a unified, component-based framework where all algorithms have access to price and liquidity discovery strategies and dark pool aggregation technology.
This common platform includes a full set of portfolio components that support implementation shortfall, cash balancing and residual risk strategies, and ensures that all algorithms have immediate access to new execution techniques and liquidity destinations as they are developed.
Additionally, the architecture enables Instinet to quickly develop new algorithmic tools as the market evolves, customise individual client solutions and more easily modify strategies that have already been developed.
Acting solely as an agent for more than 1,500 clients around the world and offering trade execution in more than 40 countries, Instinet seeks to improve institutional investment performance and lower overall trading costs through its front-end trading systems, securities crossing networks, smart-routing technology, algorithms, commission management programs and investment research products.
Its subsidiaries operate a wide array of alternative trading system platforms, including CBX in the United States, JapanCrossing in Asia and Chi-X in Europe, Canada and, soon, Australia. Instinet has offices in North America, Europe and the Asia-Pacific region.
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