Commentary

Brian Decker
Traders Magazine Online News

Three Reasons the "Downs" Have Greater Impact In An "Up and Down" Stock Market

Brian Decker, a financial planner and founder of Decker Retirement Planning Inc., argues that it is much more important for investors to consider the downside in turbulent markets than the upside.

Traders Poll

Is the adoption of electronic trading in fixed income on par of that in the FX sector?




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April 1, 1998

At Dedline - Transaction Audits

By John A. Byrne

Measuring trade execution quality is not new. But an upstart company based in Northpost, N.Y., is pulling out the stops to nab business, measuring trade execution quality for orders of 5,000 shares and more.

The Transaction Auditing Group (TAG) started the service last month, offering to measure the trade execution price against the midpoint between the bid and asked price. This measure, commonly referred to as liquidity premium, is a topic of popular discussion in academia.

"Liquidity premium is a very intuitive measure of trade execution," said Charles M.C. Lee, an accountant and finance professor at Cornell University. "This measure provides another dimension by which to analyze and measure trade execution quality."

TAG's audits evaluate trade execution against a number of measures, including price improvement, order fill, liquidity and timeliness. TAG has established an industry advisory board dedicated to fostering a dialogue on issues that affect best execution.