| NEW YORK (HedgeWorld.com)-Trading
Screen Inc. has partnered with SunGard in an attempt
to bridge the gap between order management and execution
management in the trading world.
Historically that gap isn't so large - from the portfolio
manager's desk to the trader's (and not so long ago
they were often the same person). But trading has become
increasingly electronic over the years and both regulators
and investors are demanding detailed road maps that
show traders are achieving best execution.
Philippe Buhannic, chairman and chief executive of
TradingScreen, said the future of successful trading
lies in doing hands-on trading in situations where traders
can add alpha and automating everything else. The integration
of SunGard's Decalog order management system and TradingScreen's
automated trade execution system makes this possible
on a bigger scale.
Mr. Buhannic described the environment this way: A
portfolio manager decides what to buy and passes the
order on to the trader. The trader decides how and where
to execute the trade. In the past the two used separate
systems that couldn't talk to each other, or the order
was placed by phone or on a scrap of paper. Now with
the integration of Decalog, the order management function
is automated and can funnel into the trade management
system. Ideally this creates a seamless transition,
and a permanent record that can be produced to demonstrate
best execution for both clients and regulators.
"It makes the work of the trader extremely efficient,"
Mr. Buhannic said. "Trades can be routed to direct
market access. With large trades, traders can mange
them using various tools; they can slice up the trade
and execute it throughout the day, and analyze the potential
market impact of a trade. They could decide to use an
algorithm from one of the big banks. They can do something
extremely complex in just a few seconds."
A side benefit of the full automation that integrating
the order management and execution management sides
is allowing much more trading than could be accomplished
manually. Between 50% and 55% of TradingScreen's clients
are hedge funds, Mr. Buhannic said, and at one hedge
fund a trader kept a cooler near his desk with ice in
it so he could ice his hands, which ached from executing
so many trades.
This story may be part investment legend, but it gave
Mr. Buhannic an idea for a new TradingScreen corporate
slogan: "That's what we do - we replace the icebox."
The integrated SunGard-TradingScreen system covers
multiple asset classes and allows for pre-trade analytics,
direct market access and trade management and best execution
reporting.
"The leading asset management firms that have
consolidated their organization around a high quality
OMS like SunGard's Decalog are now looking to improve
their trading process by integrating pre-trade analysis,
strategy management, access to algorithms, multi-asset
class capabilities and global connectivity into a single
system," Mr. Buhannic said.
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