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May 31, 2001

ITG's Trading Desk Role

By Peter Chapman

ITG's trading desk wins plaudits from the buyside, coming in fifth in Greenwich Associates' latest annual survey of portfolio traders. Here's what ITG's group of 55 traders does:

(1) Overflow

Acts as an overflow desk for clients. When clients get too busy they will sometimes send their ITG account executive a list; give him a benchmark such as VWAP or the previous day's close; and ask him to work the order over the course of the day.

(2) Outsourcing

Small money managers who track indexes often are reluctant to set up a trading operation which requires at least two traders and a clerk. They may just want to rebalance their portfolios once a month or once a quarter. It makes more sense simply to outsource the job to a brokerage. ITG will do this.

(3) POSIT residuals

Often after executing a trade in one of POSIT's eight crossing sessions, a customer will have more to do. He will ask ITG if his trading counterparty - of whose identity he has no clue - is interested in another trade at the midpoint. The counterparty's documented profile may state he is amenable to a phone call from an account executive if there is more stock to trade. If so, the AE may call and attempt to facilitate a cross. ITG's traders never shop blocks unsolicited, Killian says.