You are here

Agency Brokers & Algorithmic Trading: Providing Un-conflicted Execution Services

Agency Brokers & Algorithmic Trading: Providing Un-conflicted Execution Services

Accounting for close to 30% of algorithmic trading market share, agency brokers present the most formidable threat to bulge bracket firms in the algorithmic trading services market, according to a new report published by Aite Group.

Boston, MA, April 13, 2005 – According to a new report from Aite Group, LLC, Agency brokers present the most formidable threat to bulge bracket firms in the algorithmic trading service market. Most large agency brokers, in particular, have the capability to match the full suite of execution services typically provided by bulge bracket firms in addition to other bundled services, such as research and securities processing. For these large agency brokers, algorithmic trading is yet another tool in their overall execution services offering. In recent years, numerous small, yet technology-driven agency brokers have also emerged in the hope of capturing market share. Many of these agency brokers are run by ex-ITG staff, no doubt leveraging over a decade of experience they have accumulated in the marketplace.

The report provides detailed profiles of eight leading agency brokers in electronic trading: BNY Brokerage, EdgeTrade, FutureTrade, ITG, Lime Brokerage, Miletus Trading, NeoNet, and UNX.

According to Sang Lee, Managing Partner of Aite Group and the author of the report, "Agency brokers offer a viable alternative to buy-side firms looking for robust un-conflicted algorithmic trading services." Lee goes onto add, "Agency brokers with scale and high-level of industry reputation should be well positioned to capture additional market share in coming years."

This is a 23-page Impact Note. Clients of Aite Group's Retail Banking service can download the report.