Sell-Side Technology Awards 2022: Best sell-side automated trading platform—Clearpool

OVERVIEW

Clearpool is a provider of electronic trading technology created to bring transparency to broker routing. Its Algorithmic Management System (AMS) provides brokers with tools to better control their routing protocols to ensure best execution with complete transparency.

The AMS empowers market participants to achieve better quality executions with real-time, highly customized electronic trading tools. Clearpool’s AMS supports North American equity and ETF trading, with European equities available in Q2 2022. In North America, approximately 150 broker-dealers utilize Clearpool’s AMS, which executes around 2% of US National Market System (NMS) and 3% of Canadian volumes.

“The Clearpool AMS has been a valuable tool for Baird’s equity trading desk now for many years. The flexibility, transparency and analytical nature of the platform allows us to construct a menu of algo configurations for the various workflows and trading objectives that we see from our cash, program and electronic trading desks. Information is at your fingertips with the click of a mouse. From real-time routing and performance analysis, to longer views of venue performance, we have information that is actionable. It allows us to be nimble in a fast-paced environment, and the ultimate benefit flows to our clients.” 
Sean Buckley, head of electronic trading sales, Baird

THE SOLUTION

AMS clients can customize their algorithmic trading strategies and create unique algos for their buy-side clients, based on their specific trading goals. The cloud-based AMS allows brokers to control hundreds of parameters. They can fine-tune everything from venues and order types to more advanced functionality like synthetic pegging or overlaying market share. The AMS interface allows users to make all these adjustments without any code changes and nearly instantly through simple toggles and drag-and-drop functionality. Brokers who want to differentiate their offering further can inject their propriety models into custom trading signals.

Tools to conduct experiments are also built into the AMS to allow users to systematically run tests on their algorithms to measure performance. A/B testing enables users to conduct controlled experiments to methodically compare algorithm performance and effectively determine the impact of changes made to them. Additionally, if/then rules streamline trading by automatically using specific algorithms depending on stock characteristics or trading scenarios.

The AMS enables brokers to not only customize algorithms, but analyze performance and collaborate with their buy-side clients on best execution protocols. The AMS delivers analytics over the trading lifecycle, including pre-trade, real-time and post-trade reports. Brokers can use pre-trade analysis to make decisions before they trade based on specific order criteria and algorithm parameters, then monitor real-time performance against multiple benchmarks, and finally review post-trade performance with a customized transaction-cost analysis report.

WHAT’S TO COME

Clearpool’s expansion into Europe is imminent. Its liquidity sourcing algorithms are live and are already trading internal flows. The rest of the algo suite will be up and running during Q2 2022. 

Trading logic enhancements will provide more opportunities for algorithms to use discretion in routing and to advanced options for optimizing liquidity.

The company is also upgrading reporting functionality and order analysis.

WHY THEY WON

Clearpool, a wholly owned subsidiary of BMO Financial Group, continues to set the algo trading benchmark across the industry with its flagship Algorithmic Management System. Not only does it allow the brokerage community to control every conceivable variable relating to their orders, but crucially it also provides transparency and granularity so that brokers can show their buy-side clients how, where and why they did what they did in the pursuit of optimal outcomes and best execution.   

“Clearpool’s AMS delivers unparalleled transparency and control to broker-dealers, empowering them to achieve better quality executions for their buy-side clients. We built the AMS on an innovative, Agile technology stack with decades of experience in quantitative analysis and developing electronic trading solutions. Market microstructure is at the center of everything we do, and we upgrade the AMS every few months as microstructure evolves and to introduce new functionality allowing our clients to differentiate their offering.”
Joe Wald, managing director and co-head of electronic trading, BMO Capital Markets
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