Pragma Securities has released new functionality that allows traders to alter the behavior of algorithms to react to market changes as an order is being filled.
The new service called adaptive overlays allows a buyside trader to preprogram his algorithm to change its method of operation should market conditions or order parameters change. He can do this without canceling the order and creating a new one, saving time and money.
“Normally, algos are based on single discreet goal; our adaptive overlays allow for multiple trading goals–deviation from a single goal if market conditions present themselves,” said Pragma CEO Doug Rivelli. “Adaptive overlays allow for more complex strategy to be created by users, and the strategy can be much more intelligent.”
Configured directly through any standard order or execution management system, the overlays can be automatically triggered by specific market conditions or goals, such as changes in prices or percentage of a trade allocated to dark pools or crossing networks.
Rivelli said traders can simply set an order up with their parameters and forget it, letting the algorithm work on its own. And if market conditions change, traders can change the trading strategy via the overlays without canceling the existing order.
“Traders know what the algo will be doing in any given market condition,” Rivelli said. “The entire life cycle of order is monitored, and the client gets exactly what they wanted in the order.”
Three hundred clients are already using this technology, which Pragma charges for on a per-share and per-client basis.
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