Fidessa publishes white paper on Execution Cost Analysis
Discusses how brokerages can build profit from analytics by understanding trader and customer activity
New York, June 13, 2011 - Fidessa group plc (LSE: FDSA), provider of high-performance trading, investment management and information solutions for the world’s financial community, has today announced the publication of a new white paper on Execution Cost Analysis (ECA). The paper, entitled Building profit from analytics, looks at how a real-time view of execution costs can give US brokers detailed information that enables them to improve margins, enhance profit and develop new business.
Fidessa’s ECA white paper examines distinct scenarios in which cost analysis for individual traders and clients can reduce the more than 20 percent of commissions traders can spend on execution costs. Additionally, it explores how ECA can arm the buy-side with data on how sell-side broker transactions break down.
Justin Llewellyn-Jones, chief operating officer of Fidessa US, says: “Variable execution cost is now playing a more significant role in client relationship management. Including ECA data in day-to-day activities is an essential tool that allows brokerage firms to develop focused strategies to control venue executions, carefully tailor new business opportunities and select client relationships that will deliver margins most beneficial to the brokerage house. The dynamic and ever-changing market environment requires solutions like this to allow flexibility and adaptability while ensuring that the total cost of ownership remains low while functionality keeps pace with demand.”
As the paper suggests, calculating and analyzing execution costs is complicated by market fragmentation and ‘noise’ from high frequency trading, so the appropriate technology should be employed to calculate what percentage of the commission is being lost to execution costs, clearing fees, back office ticket charges, and other explicit cost points.
Jeffrey Meyerson, managing director of Sunrise Securities Corp, adds: “Over the last six months, we have experienced rapid expansion and have required close monitoring to manage our growth more effectively. During that process, Fidessa’s integrated ECA tools have helped reduce errors and made us much more productive. Our order volumes have tripled – and their technology has been our backbone. By monitoring costs in real time, we don’t get an unexpected bill at the end of the month; instead, we’re able to effectively manage our growth on a day-to-day basis. Overall, using ECA helps keep our costs at a level that we’re comfortable with and has freed up more of our time for client service.”
The full white paper, Building profit from analytics, which looks at the role of ECA in today’s market environment, is available through the Fidessa website, www.fidessa.com, or by contacting firstname.lastname@example.org.PDF (0.03 MB)