ConvergEx Offers Real-Time TCA on Child Orders

ConvergEx Group has begun to offer clients detailed transaction-cost analysis in real-time for every child order sent, not just the initial order.

Its prior TCA systems could only provide cost analysis on each order filled, not those sent. And it could do this on the parent order level only, said Craig Lax, chief executive officer of G-Trade, ConvergEx’s global electronic execution business. 

Not so with the new TCA system, dubbed PerformEx. This system can analyze the routing history of an order, all its child orders and the costs associated with getting each child order filled — or not filled, said Lax. 

“Clients demand is for transparency. Complete transparency around the fills and the misses,” Lax said. “That’s what they want and are getting it in real-time on every order.”

PerformEx offers trade analysis at every stage of a trade, from when an order is created through to the transaction itself and then settling of details and payment. Then, it determines its cost to the buyside.

The system looks at a multitude of factors now that are updated instantaneously, including: order destination route; shares sent, filled and unfilled by route; percentage of orders sent to each route and executions by each price point in the market.

The new approach, Lax said, is akin to a restaurant that has moved its kitchen out from behind a wall and put it in the middle of the dining area. “People can now see everything that goes into the process,” Lax said. “That makes them more comfortable dining, and in our case, trading.”

By offering more detailed and real-time TCA, buyside traders can adjust their strategies and increase trade performance and efficiency, he said.  

“Knowing exactly where and how successfully orders are being routed allows our customers to make immediate decisions to improve their execution performance,” Lax said. “Routing has as much to do with trade performance than anything else.”

Traders can also now visually see how orders are performing by sector and index, through heatmaps of each child order and more detailed charting of orders, such as by volume participation rate. Treemaps are also offered and provide a visual representation of the size and number of orders routed by venue, as well as the shares filled by venue.”