Nigam Saraiya

Specifically, the tool addresses a major issue facing the buy-side, wherein higher slippage occurs when sending multiple parent orders for the same instrument when they arrive at different times. 

The Order Aggregation feature sits within BestEx Research’s execution algorithms for equities and futures and allows traders to consolidate new orders with existing ones in real time, treating them as a single parent order.

Nigam Saraiya, chief product officer at BestEx Research, said: “An algorithm trading multiple orders for the same symbol can add to overall expected slippage. The more information an algorithm has – in this case, awareness and control of the total size being traded – the better it can decide on order placement and execution speed.” 

Through this approach, high execution speeds are reduced, liquidity seeking is optimised, and trading costs are lowered.

The tool has been designed with the aim of fitting into existing workflows with minimal disruption, explained BestEx Research.

“Traders simply opt in, and fills are allocated on a pro-rata basis back to the original parent orders—no need for additional customisations within their OMS. While it’s not a silver bullet, it’s a significant step forward in making algorithms more intelligent and effective in handling the nuances of multi-order trading.” 

Order Aggregation is particularly well-suited for trading desks that deal with large, complex orders, BestEx Research confirmed, wherein fair allocation without disrupting compliance workflows is key.

The new tool was developed in response to a request from Nordea Asset Management, a BestEx Research client, The TRADE understands – one of the first to put the new functionality into action. 

Speaking to the impact of the offering, Eugene Seo, head of equity trading at Nordea AM, asserted: “It is necessary that multiple orders in the same security do not compete against each other but instead are aggregated and represented as a singular order in the market. Aggregating them helps us reduce signaling risk and ensures fair volume distribution across working orders. 

“It ensures volumes are distributed on a pro-rata basis, so our investment teams are represented fairly […] Given our large average order size, our reliance is on conditional order types to achieve volume through larger and less predictable fills.”

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BestEx Research is set to launch a new framework which allows users to create bespoke implementation shortfall (IS) algorithms for each client’s unique alpha profile and execution risk preferences, The TRADE can reveal.

The new tool, Adaptive Optimal IS, has the front end integrated with a research-driven framework, allowing users to build and test multiple versions of IS algorithms against each other to iteratively improve performance.

Adaptive Optimal IS seeks to provide a solution to two primary challenges that buy-side traders face with respect to IS algorithms. Namely, the opacity of execution algorithms and their impact of their internal design on overall transactions costs; as well as the approach of sell-side execution providers, which tend to focus on marketing features as opposed to identifying the best solution for individual clients.

“Adaptive Optimal IS addresses both of these issues by completely redefining how IS algorithms are designed and customised – from the ground up,” Hitesh Mittal, chief executive of BestEx Research, told The TRADE.  

“It provides all the foundational elements needed to define an IS algorithm. For instance, the designer can specify whether the algorithm should be opportunistic, driven by percentage of volume (POV), schedule-driven, or use a hybrid approach. This can be configured based on factors such as order size, volatility, asset class, and more. In the case of equities, the designer has multiple options on how to integrate dark liquidity into the algorithm. Users can also specify how the algorithm adjusts its speed in response to varying market conditions.”

Mittal highlighted that one of the reasons IS algorithms typically fall short is due to the “noisy” nature of their measurement. Primary factors that contribute to higher IS – such as market impact costs, spread costs, rapid alpha decay during order execution and adverse selection costs – may be difficult to discern for a small order pool due to “noise” surrounding the measurement of performance. As a result, it can often be unclear whether IS resulted from natural price fluctuations in the underlying instruments or from these cost factors.

“When measurement is lacking, an algorithm’s implementation is often inadequate,” added Mittal.

“A core component of the Adaptive Optimal IS framework is its capacity for A/B testing, which supports our measurement-driven approach to algorithm design. Randomised A/B testing allows for more fair, direct comparison of strategies and helps determine which design decisions work best for each firm and trader. We can confidently design tailored strategies when we have evidence to support our design decisions.”

The launch of Adaptive Optimal IS follows the appointment of former head of platform sales at Citi, Matt Cousens, who joined BestEx Research as its head of EMEA equities.

As part of his role, Cousens holds responsibility for driving the rollout of BestEx Research’s equities execution algorithms for US and Canadian trading to the European customer base as well as their general globalisation.

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Former head of platform sales at Citi, Matt Cousens, joined execution algorithm provider BestEx Research as its head of EMEA equities. In his new role, Cousens will be responsible for driving the rollout of BestEx Research’s equities execution algorithms for US and Canadian trading to the European customer base as well as their general globalisation. He joined the firm after most recently serving at Citi for two and a half years, responsible for distribution and sales across its cash equities platform. Previously in his career he spent a year and a half at Barclays bank as co-head of electronic trading and head of EMEA equities execution sales and 12 years at Credit Suisse as its co-head of advanced execution services (AES) sales for Europe.

Merchant bank Panmure Gordon selected a former Winterflood Securities individual as its next head of trading. James Perry joined Panmure Gordon as head of trading after spending the best part of 19 years at Winterflood as its head of small cap trading, according to an update on his social media.

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In his new role he’ll be responsible for driving the rollout of BestEx Research’s equities execution algorithms for US and Canadian trading to the European customer base as well as their general globalisation.

He joins the firm after most recently serving at Citi for two and a half years, responsible for distribution and sales across its cash equities platform and leaving the bank in May last year in pursuit of other opportunities.

Previously in his career he spent a year and a half at Barclays bank as co-head of electronic trading and head of EMEA equities execution sales and 12 years at Credit Suisse as its co-head of advanced execution services (AES) sales for Europe.

“On the back of the tremendous success of our North American equities platform and the globalisation of our futures platform last year, a clear next step is the globalisation of our equities algorithms. There’s no stronger presence to lead our European expansion than Matt Cousens,” said Hitesh Mittal, founder and chief executive of BestEx Research.

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Execution algorithm provider BestEx Research appointed Paul Merolla as general counsel amid expansion plans for the US-based firm. Merolla brings over four decades’ worth of experience to the role, having most recently served as a partner at legal firm Murphy & McGonigle for 11 years, as well as nearly four years as partner at LeClairRyan. Prior to that, he served as executive vice president and general counsel at Instinet Group, now a Nomura company. Before Instinet, Merolla served as vice president and associate counsel at Goldman Sachs. Based in BestEx Research’s headquarters in Stamford, Connecticut, Merolla will report directly to founder and CEO, Hitesh Mittal.

HM Treasury appointed Ashley Alder as chair of the Financial Conduct Authority (FCA), effective January 2023. Alder currently serves as chief executive officer of the Securities and Futures Commission (SFC) in Hong Kong and has held that position since 2011. Expected to begin serving as FCA chair in January next year, Alder has been appointed for a five-year term.

Kepler Cheuvreux bolstered its economics and cross-asset strategy and institutional research teams with a range of new appointments including various new team heads. Arnaud Girod was appointed as head of economics and cross-asset strategy, having been promoted to the role after serving as co-head of institutional research at the firm for the last eight years. Alongside Girod, Philippe Ferreira was appointed as deputy head of economics and cross-asset strategy and will work closely Girod. Meanwhile, Natalia Bobo was appointed as co-head of institutional research, bringing over 25 years’ experience as a sell-side analyst to the firm. Elsewhere, Marco Baccagilo was appointed as co-head of institutional research and head of primary research.

UBS Group’s co-head of CEEMEA credit trading, Dean Cooper, is moving from London to Dubai to join Millennium Management, according to a report from Bloomberg. Cooper will report to Goldman Sachs alumnus Akash Patel, who joined the hedge fund in 2021 as senior portfolio manager. Cooper’s appointment comes as part of a hiring spree by the firm, which recently also brought Morgan Stanley electronic trader, Grant McAllen, onboard.

Digital assets-focused investment firm BlockFi’s head of US trading, Jason Wilkinson, departed the firm after just over two years. Wilkinson originally joined the firm in January 2020 and was responsible for overseeing BlockFi’s US trading team. He joined from Two Rivers Trading Group, where he served as a senior trader for just over a decade. At time of publication, Wilkinson had not revealed where he will be moving to next.

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Merolla brings over four decades’ worth of experience to the role, having most recently served as a partner at legal firm Murphy & McGonigle for 11 years, as well as nearly four years as partner at LeClairRyan.

Prior to that, he served as executive vice president and general counsel at Instinet Group, now a Nomura company. Before Instinet, Merolla served as vice president and associate counsel at Goldman Sachs.

“As we continue to expand into new markets and asset classes, Paul’s regulatory and financial services expertise will be invaluable,” said Hitesh Mittal, founder and CEO of BestEx Research.

“We are committed to providing our global clients advanced, research-driven algorithmic trading solutions, and having robust legal oversight allows us to best serve their dynamic needs across asset classes and markets.”

Based in BestEx Research’s headquarters in Stamford, Connecticut, Merolla will report directly to Mittal.

“I look forward to supporting and contributing to the continued growth and expansion of BestEx Research,” said Merolla.

“I trust that my knowledge and experience will be valuable assets to Hitesh and his management team as we work to provide BestEx Research’s global client base with leading-edge trading solutions paired with unparalleled transparency.”

Earlier this year, BestEx Research expanded its futures trading offering with user access to Eurex, Euronext, the Australian Securities Exchange (ASX) and the Singapore Exchange (SGX). The move marked the first time the firm offered futures trading outside of the US in light of growing demand for its algo trading platform.

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The expansion into Europe and Asia-Pacific through the new connections is the first time BestEx has ventured outside of the US, taking its total number of linked futures exchanges globally to 10.

Alongside the partnerships with the four exchanges, the algo provider also confirmed that it has added access to crypto futures products traded on CME Group as demand for digital asset trading continues to ramp up.

BestEx launched its futures algorithms in February last year following a series A funding round at the end of 2020. The company said the new algorithms would better account for intraday liquidity behaviour or fluctuations in the roll calendar caused by volume.

The buy-side can access BestEx’s algorithms through most execution management systems (EMS) or order management systems (OMS) with an option to execute through a broker.

“Our integrated solution designed specifically for futures trading combines high-performance execution algorithms with a cloud based Algo Management System (AMS) that allows clients to customise their algorithms with just a few clicks, back test their orders’ performance against an exchange simulator, create A/B tests, run transaction cost analysis and get real-time access to the underlying algo behaviour,” said Hector Robles, managing director of business development at BestEx Research.

“We continue to see strong demand for our solution and for access to a broader universe of exchanges globally.”

The development follows the appointment of electronic trading industry veteran, Hector Robles, as its new director of business development at the end of last year.

Shortly after his appointment, BestEx confirmed it would be building a Canadian equities platform in partnership with Scotiabank aimed at reshaping electronic trading for Canadian equities.

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Through the partnership, BestEx Research and Scotiabank will build the first algo trading platform designed specifically for Canada, which has previously relied on execution algos designed for US equities.

Through its cross-asset electronic suite of products, ScotiaRED, Scotiabank will be the only Canadian bank providing access to this trading platform in the Canadian market.

“Expansion to global markets is a natural next step following the success of our broker-neutral execution solutions for US equities and futures,” said Hitesh Mittal, founder and chief executive of BestEx.

“We’re thrilled to be partnering with Scotiabank to target the specific needs of buy-side and sell-side desks all over the world who trade Canadian equities.”

BestEx Research’s algorithms are built on research-driven, quantitative order placement logic and include a cloud-based algo management system (AMS), which provides transparency and control over orders in real time.

The algo trading platform is expected to launch in the second quarter of 2022..

“Working with BestEx Research, we will deliver a next-generation algorithmic trading platform and address the market’s need for better performance, transparency and control,” said Paul O’Hea, global head, equity sales and trading at Scotiabank.

“The agreement builds upon our existing US relationship with BestEx Research and enables us to scale our Canadian equity offering with leading-edge technology, powered by our extensive expertise in Canada.”

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Hector Robles will take on the role, joining from RCM-X where he oversaw the distribution of its algorithmic and quantitative trading products.

Robles brings over 15 years’ experience in electronic trading and transaction cost analysis (TCA) expertise to BestEx Research.

Prior to RCM-X, Robles was responsible for the distribution of UBS’s algorithmic execution strategies in futures, foreign exchange, and fixed income across the Americas.

In addition, Robles served as global head of electronic trading for futures at Mizuho Securities, as well as previously serving in senior sales and product roles at Quantitative Brokers. 

In his new role, Robles will report to BestEx Research’s founder and chief executive officer, Hitesh Mittal.

“Hector is arriving at a pivotal time in our growth and we are confident that his deep knowledge of the complexities of algorithmic futures execution and his diverse experiences in senior roles at institutions large and small will help drive our expansion across markets and deliver our best-in-class solutions to a broader audience,” said Mittal.

Robles’ appointment follows a string of leadership hires by BestEx Research over this past year.

Most recently, Darren Zhou, a former JP Morgan Chase equities electronic trading executive, was appointed to head up BestEx Research’s execution services.

In addition, David Conner and John King, former executives of Citi and Liquidnet respectively, joined BestEx Research’s client services team in leadership positions.

“I am thrilled to join Hitesh at BestEx Research, a company I’ve admired for its commitment to research, innovation, and data-driven solutions to algorithmic trading challenges,” said Robles.

“There is significant demand for BestEx Research’s advanced algorithms in the futures market. I look forward to working with this client-centric team and the most sophisticated trading platform available for futures.”

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Darren Zhou has joined BestEx Research as director of execution services after most recently serving for the last three years at JP Morgan Chase in an electronic equities trading role.

Zhou has an extensive career in electronic trading having also served in electronic services roles at Virtu Financial and KCG Holdings.

Previously in his career he also served in futures and options electronic trading roles at Bank of America Merrill Lynch for nearly four years, Barclays Capital for one year, and JP Morgan for three years. He also notably spent nearly seven years at Lehman brothers across several roles including in futures and options.

“Proactive monitoring, real-time performance evaluation, flexible customisation, and continuous improvement are the key components of an unbeatable algo execution experience, and that’s what we strive to deliver along with our state-of-the-art trading technology,” said Zhou.

BestEx Research secured $5 million in funding in a round led by QC Ventures at the end of last year and has since launched a suite of new algorithms for futures trading in February earlier this year.

Zhou’s appointment follows two other senior additions to the firm in this year so far as it looks to expand its client offering.

David Conner, former Citi, Lehman Brothers and JP Morgan, and John King, former Liquidnet, were appointed as managing directors for the algorithmic trading platform provider’s client services team in the US.

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