BofA Decipher: A brand new FX algo from Bank of America Merrill Lynch

Bank of America Merrill Lynch is a leading provider of electronic trading solutions and their Instinct® algorithmic FX strategies help clients to achieve superior execution results. The bank has recently added a new algo to its suite of FX strategies called Decipher. We talked to Zeke Vince Global Head of eFX Sales to discover more about it.

BofA Decipher: A brand new FX algo from  Bank of America Merrill Lynch
Zeke Vince

What type of algorithm is Decipher and what has it been designed to do?

It’s an intelligent implementation shortfall algo that targets arrival price, balancing impact and opportunity costs, for a given level of urgency.

What makes Decipher unique and how does it go about achieving its execution objectives?

Decipher is a conscious algo that reads several market factors in real time. It adjusts its trading behavior accordingly limiting manual intervention. Decipher is also calibrated and optimized using advanced quantitative techniques based on historical behaviors’ to enhance future executions.

How much feedback from clients has influenced the construction and design of Decipher?

About 2 years’ worth, we’re a client first franchise and our builds are driven by their feedback

In what ways have you leveraged new technologies to engineer Decipher and how has this helped to differentiate it from an earlier generation of algos?

Over the past year Bank of America has renovated its entire eFX infrastructure. For algo’s specifically, we’ve partnered with our Equity business and migrated all of our operations onto their technology stack. There are many benefits to changing our algo technology but at a high level it’s customizable and allows us to release functionality quickly which ties into our 2020 growth plans and beyond. Decipher is our first release of a new algo backed by this technology.

What level of customisation and control is possible with Decipher to enable clients to manage and fine tune its parameters?

The idea behind Decipher is to have a simple ticket for clients that is heavily tuned to their needs. There are urgency settings, a limit and a fill now option. The rest the algo handles.

What choices do clients have with respect to the liquidity that Decipher interacts with?

It’s a hybrid liquidity model which executes selectively against the external market and our internal franchise. The size of our franchise allows us to be  particular about where we source liquidity externally and we have real time monitoring to manage this.

What types of client are going to be particularly interested in Decipher and how will they be able to access it?

All, but specifically clients with a pricing objective who understand the value of trading with passive franchise liquidity.