Waters Rankings 2014: Best Algorithmic Trading Provider — Instinet

Instinet Execution Experts, Nomura’s winning offering in the algorithmic trading space, is a set of global strategies that addresses a wide range of electronic trading objectives, with extensive controls to refine strategy behavior and execution style. MAKE, the latest addition to the firm’s algorithmic trading suite unveiled in February this year, supports buy-side clients’ “passive-side” trading by sizing and distributing “child” orders at various price levels and across destinations, reducing, according to Instinet, exposure to signaling, gaming, and predatory techniques, issues that large numbers of capital markets firms are all the more cognizant of, thanks in part to the recently published Flash Boys, Michael Lewis’ book about the clandestine world of high-speed trading using, among other things, algorithms.

Algorithms are plentiful these days of course, but what truly sets Instinet apart in this saturated and ultra-competitive market has been its nuanced approach to regional challenges. In Asia-Pacific, it recently unveiled 10 new offerings that eschew pure time-weighted and volume-weighted average price (TWAP and VWAP) benchmark strategies, opting instead to cross dark and lit pools to seek out hidden liquidity across the region. Likewise, its other algorithms in the suite cover participation objectives, as well as pairs strategies. Market coverage in 38 countries gives Instinet a broad reach, reflecting the global mindset of its client base, while in other areas, the latest addition of a last-hour VWAP crossing session in its alternative trading system gives it a distinct edge over its competitors.

As is essential in the modern trading environment, Instinet not only provides clients with access to its algorithmic suite through its own execution management systems, but also via direct FIX connections and through third-party systems. Clients also have the ability to access user-defined controls for the algorithms, giving them the ability to customize their strategies rather than being forced to “like it or lump it,” an approach that limits individual differentiation. The company, which has a 40-year history in electronic trading, recently announced a number of significant appointments, including Jonathan Kellner as CEO and Tony Necakov taking on the role of CTO.