Sell-Side Technology Awards 2014: Best Smart Order Routing Product/Tool — SunGard

Trading algorithms have evolved in recent times to a point where they now exhibit “behavior” and what can best be described as the ability to make informed “decisions,” influenced by past trading experience and based on external stimuli. SunGard’s Fox Fashhlight is a prime example of this new generation of algorithms underpinning firms’ SOR pursuits.

Fox Flashlight, unveiled in 2013, is designed to interact with both displayed and non-displayed markets to offer traders deeper and better quality liquidity. According to SunGard, Flashlight was expressly created to address traders’ complaints about “missing” liquidity, where they typically route orders for as many or more shares as are displayed in the market, but end up executing fewer than anticipated. Flashlight evaluates its performance on a daily basis—an increasingly important function that any algorithm worth its salt should offer—using a proprietary methodology that compares executed quantities to National Best Bid and Offer (NBBO) displayed shares. SunGard claims that it consistently executes in excess of 140 percent of the displayed NBBO shares.

Another Flashlight attribute is its ability to react in real time to market conditions, liquidity, and potential operational threats such as a sudden change in hit rate or a halt of operations at a market center, ensuring high performance regardless of events affecting third-party vendors such as dark pools or FIX networks. Its proprietary liquidity-seeking logic evaluates all market centers, including exchanges, dark pools and market-makers on a variety of factors and then predicts where to find the best liquidity on a symbol-by-symbol basis. Fox Flashlight also offers users the option of crossing shares with Fox River’s institutional order flow through a purely institutional, natural liquidity-crossing mechanism that operates independently of alternative trading systems (ATS) or market-making facilities. Fox River ensures that all price improvement is provided directly to the customer, and does not allow any liquidity providers to participate in this function.

Flashlight evaluates its performance on a daily basis—an increasingly important function that any algorithm worth its salt should offer—using a proprietary methodology that compares executed quantities to National Best Bid and Offer (NBBO) displayed shares. SunGard claims that it consistently executes in excess of 140 percent of the displayed NBBO shares.