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June 5, 2013

Barclays Algo Adds Capital

By John D'Antona Jr.

Barclays now offers U.S. traders the ability to tap the broker's capital when executing an order via select algorithms.

The new functionality is a first via an algorithm, according to Barclays. The firm also claims this will help the buyside find the liquidity it needs faster, transferring risk away from the institutions by allowing the bank to either buy or sell equities to complete a trade.

Clients must be entitled by Barclays before they can use the capital commitment feature, head of equities electronic trading Bill White told Traders Magazine. Once set up, clients can select the feature on a per-order basis via box on their algo order screen. White said the capital commitment feature is currently available in its most popular algorithms, Hydra and VWAP.

"With a click of a button on their EMS, the buyside trader puts in his inputs and that's it," White said. "This is really about simplifying clients' work flow, assisting in liquidity capture and execution risk management."

Here's how it works: Once a trader clicks the capital commitment button, a portion of the client's order is eligible for capital commitment, thereby providing the client with instant liquidity, as well as saving them the execution cost associated with that portion.

Barclays is offering this capital commitment feature in all U.S. stocks in which it makes markets, White said.

 

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