Waters Rankings 2015: Best Algorithmic Trading Provider ─ Instinet

Tom Whelan, managing director at Instinet, says the focus over the past year has been on increasing performance. Pricing models were improved, along with passive order management and a number of the signals that drive Instinet's aggressive trading tactics. A compilation language where clients are able to define reasons where the algorithm should switch to another was also developed, according to Whelan.

All of these enhancements were made possible in part because of the relationships Instinet has with its clients, according to Whelan.

"We have clients willing to share their results with us and work together to improve performance," Whelan says. "We can do a lot of that on our own, but I think we're really at our best when we're getting feedback from clients and working with them to improve performance."

It's not just overall improvements in how well the algorithms work that come from client relationships. Whelan says the firm is able to adjust the ways they execute orders to meet exactly what clients are looking for.

"They get the behavior that they're looking for just by fine-tuning parameters and settings on our side," Whelan says.

Instinet's willingness to constantly tweak its algorithms to ensure it's getting the best out of them has been a huge differentiator, according to Whelan. With the industry getting smarter every day in terms of what to expect from algorithms, the statistics are a huge factor in the decision-making process.

"I really think the buy side has gotten much smarter and much more dialed in to how good you are, performance wise," Whelan says. "I think the numbers, the total cost analysis and the performance are really driving people's algorithmic choices these days."

As for the future, Whelan says Instinet plans to be as transparent as possible with its algorithms to provide the best insights possible.

"We're all about transparency," Whelan says. "I think we'll probably do more of that around bolt-on tools on top of the algorithms or bolt-on tools to the execution management system (EMS) transparency tools."