BST Awards 2018: Best Buy-Side Algorithmic/DMA Product or Service—Dash Financial Technologies

Dash Financial Technologies has had a busy few years. Its current incarnation was formed by the merger of Dash Financial and LiquidPoint, which was undertaken by then-private equity owners GTCR in January 2017, but the firm was brought back under management control through a buyout announced in March 2018. A string of senior hires was then announced throughout the course of the year. It’s been a whirlwind by any measure, but one consistent point of focus has been its technology, in particular, Sensor Suite.

One of the original technologies debuted at Dash’s founding, Sensor Suite is effectively a smart order-routing algorithm that focuses on optimizing client execution in equity and options markets. It focuses on illustrating two main areas for traders—the first of which is liquidity capture. “The complexity of the markets in both options and equities, as we all know, is the real challenge for clients,” says Glenn Lesko, chief growth officer at Dash. “There are as many different pricing models as there are different types of trading venues, and these are literally changing every month. Clients want to know what new order types are available on various exchanges, whether pricing models have changed, which will impact their explicit trading costs, and how we can get the best value for them with regards to liquidity capture compared to the price that they’re paying the venues. It’s mostly updating what’s going on in the markets,” he says. 

The other primary area of focus for Sensor Suite is around speed and how that relates to performance—or in other words, latency calibration—which is unsurprising, given the pace of modern markets. For this, Lesko says, Sensor Suite provides trade lifetime and post-trade analytics with metrics around visible liquidity, how much liquidity has been captured by the routing algorithm, and how it goes about capturing that liquidity. 

Given the nature of the product, it falls somewhat outside the norm of tech development for buy-side technology, in that it’s more or less constantly updated, according to Lesko. “The interesting thing about Sensor is that we really update and enhance it every day. It’s very configurable and we can make different configurations for different clients and different enhancements on a case-by-case basis. It’s honed literally on almost a daily basis by ourselves and our clients who can call us and make changes to the routing.”

This, says Lesko, more than anything, has been where the real development work has taken place, in creating a finely tuned machine to execute efficiently in noisy markets.