Under MIFID2, executing traders will be accountable for every aspect of a client order and for ensuring that a firm’s best execution policies are implemented. Ultimately, this means demonstrating the ability to record a consistent, compliance-approved process of why each decision was made.
OTAS helps traders achieve this via a simple 2-step process using the Trade Schedule and Intraday Lingo applications. Traders can copy, store and send the analysis from both apps to satisfy the desk, compliance and clients.
In our previous Function of the Week, we demonstrated how traders can optimize an entire order pad and distribute high and low touch orders based on exceptional trading characteristics and workflow scenarios. This week we concentrate on the individual orders that comprise an order pad, focusing on the initial stage of the execution process, Strategy selection and Implementation.
The Trade Schedule component offers traders proprietary pre-trade order analysis using quantitative forecasts of stock risk(volatility), impact cost and total expected trade costs for their order size across a range of benchmark strategies. This includes our own Optimal schedule and provides justifiable decision making evidence for strategy selection and best execution processes. Each order schedule can be optionally tailored to an individual clients needs by presenting revised cost calculations based on the clients level of risk aversion.
Once a strategy is selected and implemented it is then dynamically monitored in real-time, continually calculating suggested participation rates to account for changing market conditions and execution fill data throughout the life of the trade.
Key Benefits of OTAS Trade Schedule:
- Demonstrating ‘best possible results’ on an on-going, consistent, systematic basis.
- Variable cost output forecasts based on individual client risk appetite/trading style.
- Justification of pricing decisions for OTC risk trades.
- Dynamic in-trade monitoring of schedule suitability(decision support for adjusting participation)
- Multi stage analysis of order execution process
Example: Schedule forecasts to Buy 200k Siemens
A large majority of our EMS partners now have the OTAS Schedule component along with risk, impact and total cost forecast columns directly embedded into their trading platforms, meaning their clients are already benefiting from fully integrated, optimizable execution processes.
Example : Blotter view optimized by ‘riskiest’ orders
Trade Schedule analysis is just one of a suite of bespoke real-time trading applications we have created to help Global Trading desks provide a systematic approach and facilitate ‘sufficient steps’ under the guidelines and framework of MIFID II.
Contact us now to explore the current apps available within your EMS and how we can assist your current execution policy or technology mandate at otassales@otastech.com
