Trade Informatics’ Anti-Gaming Solution Hunts HFT Predators

TI Fact analyzes how your trade occurred and whether your brokers are allowing high-frequency traders into their dark pools.

Its the nagging question in the back of every trades mind – Did I get the best deal on that trade? Quantitative analytics firm Trade Informatics unveiled this week TI Fact, a routing analysis solution that provides millisecond records of brokers trades on a T+1 basis.

Via Trade Informatics revolutionary framework, asset managers can hyper-measure, evaluate and analyze their trading history to identify deficiencies and take corrective action, driving implementation shortfall lower, according to a press statement.

“This type an analysis has become very popular since the publication of “Flash Boys,”” said Matthew Celebuski, CEO of Trade Informatics, referring to the Michael Lewis blockbuster. “Normally the information comes from a broker in a modified tab format, that’s how the brokers put it together. We will look at the time stamp on the broker and the shares executed and then we will find that trade in the tape.”

“By getting the route information and looking at the latency time stamp from the broker, were about to find that print on tape, that means we can rebuild the market conditions from the tape,” Celebuski told Traders.

Trade Informatics takes that numerical data and informs clients why and where they have trading deficiencies, offers recommendations to correct them and monitors performance to ensure implementation shortfall is minimized on an ongoing basis.

“We can look at every venue and see if these are good venues for you. We have worked with clients who have gone to these venues and said “If you don’t stop this behavior, we are going to turn you off,” added Celebuski.

According to Celebuski, traders have been suspicious of broker activities well before “Flash Boys” but the charges made in the book have caught the attention of senior managers and the risk control and compliance officers. “These people wanted an explanation, “Whats going in with this?”” he said.

Celebuski claimed TI Fact is being used by buyside firms at the moment but declined at press time to provide any firms using the solution. That said, he thinks that the broker performance has improved.

“Honestly, I dont think its that bad. Over the past two years, the market has self-regulated with everything going on. I think its the fact that everyone is looking at this in one way or another,” he told Traders.