According to Nigam Saraiya, Chief Product Officer at BestEx Research Group, it is common for companies around the world to have multiple orders for the same symbol and side sent to different accounts and portfolios at different times. He says it’s an issue.
Nigam Saraiya
“This is not specific to any particular region, market or company,” he told Traders Magazine.
To address this issue, BestEx Research Group, an independent provider of high-performance algorithmic execution and measurement solutions for equity and futures trading, recently launched order aggregation capabilities within its execution algorithms.
“Order aggregation addresses this seamlessly without disrupting customer workflows,” Saraiya commented.
“Every element of our product design is aimed at improving transaction costs or workflow or both, as in the case of order aggregation,” he said.
Saraiya said that order aggregation improves the efficiency of the algorithm’s scheduling, order placement, and liquidity-seeking operations by combining parent orders of the same symbol and side, ultimately reducing trading costs for customers. Ta.
He believes that executing multiple parent orders for the same instrument (sent at the same time or at different times) can result in faster-than-optimal execution speeds, suboptimal limit order submissions, and missed opportunities for block trades in fragmented markets. He added that transaction costs often increase due to such factors.
BestEx Research’s order aggregation addresses this challenge by consolidating orders on the same side of the market, optimizing algorithmic performance and reducing trading costs.
According to Saraiya, customers can opt-in to this feature without changing their workflow, and fills are assigned in real-time to each parent order, even when BestEx Research’s algorithms trade as a single block order.
Additionally, institutions that manage parent orders from different portfolios that arrive at different times can use this functionality to meet regulatory and compliance requirements and develop complex order aggregation capabilities within the OMS. You can ensure fair and unbiased execution across all your portfolios without having to worry about anything.
BestEx Research’s prorated fill distribution ensures that each parent order is treated fairly, even if it belongs to different accounts.
Order aggregation capabilities are particularly relevant for trading desks that process large, complex orders and want to ensure fair allocation without disrupting compliance workflows.
Nordea Asset Management was one of the first companies to implement this new feature.
Eugene Seo
“For us, order aggregation is an absolutely essential feature,” said Eugene Theo, Head of Equity Trading at Nordea Asset Management.
“Instead of multiple orders within the same security competing with each other, we need them to be aggregated and represented in the market as a single order. By aggregating them, we reduce signaling risk and We can ensure a fair distribution of volumes across the board,” he told Traders Magazine.
In addition, the aggregation feature ensures that volume is distributed pro rata across work orders so that investment teams are fairly represented, he said.
“This ensures that volumes are proportionate, so our investment team is fairly represented,” Seo added.
Seo believes that order aggregation is important not only to reduce impact but also to ensure block liquidity. This is because aggregated orders may allow you to trade against larger orders with significant minimum quantities.
“Given our large average order size, we rely on conditional order types to achieve volume through larger and more unpredictable fills,” he said.
Order aggregation can be configured upon request to meet the specific needs of BestEx Research clients.
Both aggregation eligibility requirements and fill attribution processes can be customized to suit different workflows and preferences. BestEx Research’s AMS allows sell-side firms to selectively offer this functionality to their buy-side clients, tailoring the criteria to meet each client’s needs.
