TCA? Remember what those letters mean?
And it not just for buyside post-trade analysis any more.
In a conversation with Timothy Lang, CEO of Red Bank, NJ-based Global Liquidity Partners, mused about the development of Trade Cost Analysis and its evolution.
Some years ago most traders might ask what the important letters TCA meant. Today, the buy-side has developed sophisticated internal and external tools that accurately and scientifically [particularly in the age of data availability] measure the true cost of execution among different algo providers, Lang said.
He added that execution providers that develop unique routing techniques that seek to effectively source liquidity while minimizing information leakage can thrive in providing TCA – and not just for equities.
Firms that develop superior algorithmic strategies, and that maintain superior technology platforms- will have the upper hand in the TCA comparison battles, Lang said, noting TCA should be coupled with the aforementioned in order to provide a complete offering to the buy-side.