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Spoofing, Surveillance and Supervision

Jay Biondo, Product Manager - Surveillance at Trading Technologies, co-authored an article along with James Lundy and Nicholas Wendland, both of Drinker Biddle & Reath LLP, reviewing the CFTC's regulations and expanding efforts, 21st century surveillance and supervision, as well as strategic recommendations.

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July 1, 2011

Cost-Sensitive Traders Catch a Break

By John D'Antona Jr.

Technology provider Pragma, who offers products through broker-dealer Weeden & Co., is making it cheaper for certain traders to access its algos.

Pragma has started to host its algos on its own server, rather than the old method of locating them on a client's server, said chief executive David Mechner.

"Customers used to run their algos on their own site, but now we host them and run them," Mechner said. "It's a turnkey solution for users."

He said the target audience was quantitative hedge funds, statistical arbitrage accounts and "systematic traders."

"All these accounts are cost-sensitive and in search of cheaper executions. Hosted algos help them keep costs down," Mechner said.

Similar to an aggregator, Pragma calls this a hosted algorithm product, which provides the buyside with a cheaper, single point of entry to its algorithmic offerings. The buyside selects the algorithms it plans to use, which divvy up the parent order into child orders. Pragma then routes the orders via brokers' direct-market-access.

Pragma also offers buyside clients post-trade performance and routing reports to help them manage costs, bundled into the hosted algorithms service. Users can manage their commission flows by designating the percentage of order flow that interacts with each broker.

The system is in beta testing, and Pragma expects widespread use to begin in the third quarter of 2011.


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