Last year, New York-based Quantitative Brokers (QB), a futures commission merchant and dealer-neutral broker-dealer and provider of agency algorithms and transaction-cost analysis (TCA) functionality across futures and fixed-income products, made its debut at the Buy-Side Technology Awards in the best buy-side TCA provider category. This year, the firm is back as the winner of the best buy-side algorithmic/DMA product or service award, thanks to its flagship futures arrival price algorithm, Bolt.
Bolt sits within the QB algorithm suite designed to address particular features and behaviors of the futures and fixed-income markets not already addressed by other algorithmic offerings, which have tended to focus instead on the equities market. The suite is rounded out by Strobe, for average price within a specific window for trading on schedule and spread capture; Legger, for multi-leg spread trading; and Closer, launched last year and specifically aimed at optimizing execution relative to an instrument’s close or settlement price benchmark.
With Mifid II coming into sight on the European horizon, the buy side has never been so concerned with getting best execution right, from both regulatory and operational perspectives. The Bolt algorithm balances passive and aggressive fills, and systematically manages market risk trade-off between paying for liquidity and capturing the spread. QB has enhanced Bolt’s functionality through “artificial intelligence-like” execution technology, designed to help users minimize slippage against the arrival price benchmark to provide quantifiable best execution. Bolt has also been upgraded to support a feature allowing traders to access two new versions alongside its existing standard mode, for passive and aggressive strategies, which can be switched while working on a particular order.
Cost measurement through TCA has also become a vital part of best execution and the performance of Bolt can be assessed through QB’s visual analytics and statistics, while its TCA services have been extended to its clients as a “multi-broker TCA” service, facilitating a comparative assessment between Bolt and the rest of the QB’s algorithm suite, and users’ other execution providers.
QB’s development as a technology provider has not gone unnoticed by financial backers, as the broker attracted a $24 million strategic investment from Centana Growth Partners in July this year. The investment will allow QB to expand its quant research, algorithm development and its trading platform teams as it looks to break into new asset classes like options on futures contracts and regions, where it is seeking to provide services for Asian futures and exchanges.
Bill Murphy, CTO of Blackstone, once again joins the podcast to discuss the private equity firm's new offices, designed to house its innovations team.Subscribe to Weekly Wrap emails