Momtchil Pojarliev
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Some Like It Hedged

BNP Asset Management's Pojarliev discusses a variety of options to address foreign currency exposures. Although there is no single best-practice solution for addressing foreign currency exposures, institutional investors have three main choices, he says.

Traders Poll

Amid changes in builder, do you think the CAT project will be completed by 2020?

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January 1, 2005

Trading Strategies Made Easy

By Editorial Staff

Smith: I guess it would be. And also Yellowstone to some extent. But we don't like the idea of a black box. We believe in the transparent box. We've tried to build a high degree of transparency into all of our products. So the user can see exactly why decisions were made every step of the way. It is very difficult to de-bug a black box. Our stuff is a platform for trading ideas. Trading opportunities. So, if you have a trading idea and you want to find out why it had a certain P&L or why it created certain orders? Why did this happen? You need a transparent box, not a black box.

Traders: With Yellowstone, where does the data come from? Do you have feeds?

Smith: We are not a market data provider. We have adaptors to popular market data sources. The users have their own deals for the market data through the common vendors out there.

Traders: Do they use vendors or go direct to exchanges?

Smith: We actually have an adaptor to one of the exchanges, but I haven't seen anyone use that.

Traders: 4S.Everglades plugs into brokers?

Smith: Exactly. We connect to about half a dozen brokers through FIX. There are others we could connect to if clients wanted to go to them.

Traders: Can you mention a few of the brokers?

Smith: Credit Suisse First Boston's AES, Barclays Capital, Lehman Brothers. Fimat, the brokerage subsidiary of Societe Generale in France.

Traders: Is 4S.Everglades competition for brokers' algorithmic trading servers that execute against benchmarks such as VWAP?

Smith: Not really. The buzz around algorithms is good for firms like ours. For those customers looking to run alpha strategies, a product like ours can be used in combination with what [the brokers] are doing. They would use Everglades with an [CSFB] AES tag, for instance.

Traders: So 4S.Everglades execution strategies are different? Not just VWAP?

Smith: You can do that in Everglades. But our strategies...Do this when market conditions are such. Get a pair done in a ratio. Get an index done in this way. Get a basket done when certain conditions happen. As opposed to: get a basket done at VWAP. It is more opportunistic. I want to wait until the market hits this level, plus or minus some percent and then put in an order at some other price. I'm not saying someone couldn't write a sophisticated VWAP with our stuff. But that is not what they are coming to us for.

Traders: O.K. Thanks Steve.