Wedbush Securities has launched a trading platform provider that the firm says will dramatically speed up trades for fund managers and other institutional investors, as well as give them better control over their transaction costs.
The platform, from the Wedbush Execution Solutions Group, is based upon the ultra low-latency trading platform developed by Lime Brokerage.
Lime, which Wedbush had acquired last year, worked on the system with Wedbush for more than a decade for the financial firm’s own internal trading.
The platform offers firms a variety of functions, including high speed market data via the firm’s proprietary CITRIUS system as well as risk management and compliance engines for Securities and Exchange Commission rule 15c3-5 as wellas 11 trading algorithms.
Two key advantages marketed by Wedbush are trading speeds measured in microseconds as well as the ability to control prices and set fixed commissions for trades.
With the system, firms will be able to create their own pricing packages, according to Kevin Beadles, Wedbush’s managing director of Execution Solutions Group.
“Firms can now say ‘This is my cost, so I know I have to price this in my commission. Here are the costs that you will incur, fix it,’’’ Beadles told Securities Technology Monitor. “You can fix your cost across the network, whether you are going to sell one share or one million.”
Beadles says the platform has a more efficient infrastructure than that usually available to fund managers. Two other key factors for increasing trading speed are the CITRIUS system, which takes in and processes market data at an average of 75 microseconds latency even under heavy loads, and the platform’s 11 algorithms.
As a result, firms can trade much faster and avoid the price movement that often occurs as trades are broken down and wait to get filled.
The algorithms within the platform include a Direct Market Access algorithm, which searches for displayed and non-displayed liquidity and dynamically recalibrates among venues, and DarkSweeper, which searches for dark pools for non-displayed orders.
“The transparency provided by our models allow clients to better manage their expenses and order routing decisions which provides best execution while also potentially allowing them to realize significant cost savings," said Beadles.
The system is marketed for all types of money managers and institutional investors that don’t have the time or money to create their own trading systems, as well as dealers who’d like to augment their own platforms. Currently, the platform is primarily geared for equities, but Beadles says that Wedbush is also launching a system for options.
Wedbush Securities is one of the nation’s largest securities firms and a top ranked liquidity provider for the Nasdaq Stock Market.
In January, Lime Brokerage said it reduced the time it takes to execute pre-trade risk checks to less than a millionth of a second. The provider of low-latency technologies and high-volume agency brokerage services said it was achieving a benchmark average of fewer than 250 billionths of a second in executing pre-trade risk controls, in a new service called LimeDirect.
Tommy Fernandez writes for Money Management Executive.