Sell-Side Technology Awards 2023: Best sell-side automated trading platform—Tethys Technology

Products: TethysEMS and TethysALGO

Overview

TethysALGO and its associated slippage factor neutralization (SFN) framework provides sell-side users with a global solution that minimizes slippage against a benchmark and includes arrival price, VWAP and close price algos for a single or portfolio of securities. This is a new approach that uses fast-convergent and stable machine learning techniques. The product has been well received due to its consistent performance for a wide variety of securities under various market conditions. Tethys Algo includes execution algorithms for global equities, futures, options and FX, demand reporting, and order monitoring and control. It addresses the challenge of managing and executing trades across multiple markets and asset classes.

“Our firm offers a true partnership to our sell-side clients. Although we are a technology firm, we understand our clients’ businesses and their drivers of cost and revenue, and we strive to offer them not only innovative products and a high level of service but also ways to maximize revenue through offering superior algorithms, optimal routing solutions and sales/marketing support.”
Nitin Gambhir, CEO and president, Tethys Technology

The solution

Tethys’ proprietary SFN framework is a core reason for TethysALGO’s success. The approach allows the identification of factors driving slippage and provides functionality to neutralize or hedge them. Tethys offers a broad algo product, along with algo wheels, A/B testing, and return and alpha capture-focused transaction-cost analysis (TCA). With a real-time user-acceptance testing (UAT) environment and live exchange simulation, Tethys reinforces consistent results in advance of live trading, allowing traders and portfolio managers to maximize returns and improve their overall performance.

Secret sauce

Tethys provides component-based, scalable architecture that allows for rapid updates and simple customization. This architecture enables the firm to deploy the latest machine learning/AI research and real-time models across all its algo products and regions. This ensures that Tethys’ users have access to the latest technology and market impact models, giving them a competitive edge in their trading activities.

Recent enhancements

  • Tethys’ SFN framework provides a new approach to addressing slippage and covers a range of market conditions and security attributes.
  • The firm’s global portfolio algo now includes inter-listed trading across the US and Canada, providing an updated electronic offering.
  • Tethys has unveiled a new global tick database and is using machine learning/AI techniques to allocate trades in real time on its algo wheel.

Future objectives

Tethys’ plans for the next 12 months are to:

  • Extend its algo wheel, A/B testing and TCA capabilities to sell-side firms’ clients
  • Release dark pool functionality for Brazil/B3 in algo routing (pending regulatory approval), including single-dealer platforms and B3
  • Integrate EROUT Algo’s new release with event-based order release (time, upon closing imbalance, etc.) and the Tableau Data Management Platform to offer direct access to execution data and TCA customization to clients

Why they won

Tethys Technology, a New York-based algo trading technology specialist, follows up its pair of wins in the 2021 SST Awards and BST Awards by emerging top in best sell-side automated trading platform category in this year’s SST Awards. Its win is largely down to two products—TethysEMS and TethysALGO—although it is the latter with its slippage factor neutralization framework that proved decisive in the final analysis. TethysALGO features arrival price, VWAP and close price algos as a means of combating slippage, the difference between the expected price of a trade and the price at which it is executed, and the bane of all execution professionals.

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