What is TD OpenICE?
TD OpenICE is our institutional currency execution (e.g. ICE) algo platform. An increasing number of our institutional clients (real money managers, asset managers, corporate treasurers) are trading currency electronically and this algo platform allows them to specify their orders to us in an automated and systematic way. The platform is very much a result of client demand. TD has been pushing its presence in the real money market and a big part of that strategy has been the development of a service that allows them to easily execute currency trades electronically.
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| The TD OpenICE™ Interface on Bloomberg™ |
What functionality does the platform have?
TD OpenICE is very simple yet powerful. In TD OpenICE, users control the algorithm from a single user interface, rather than through a myriad of interfaces for different strategies as with other providers. We recognized that all trading algorithm share three common dimensions of control: Time, Volume and Price. By controlling each of these dimensions individually, users can derive any trading strategy they wish and be in full control of the logic. By deconstructing algorithmic logic in this way we are not only able to fit everything onto a single user interface, we also provide a great deal of transparency and simplicity, which clients appreciate.
How is TD OpenICE more transparent than other algos?
First, we ensured that all of the controls for defining one’s time window, slicing logic, volume allocation and price constraints were labelled such that they were self-explanatory. We also deliberately avoided having a litany of different algos, many of which do the same thing but with only slight variation, each with a sinister sounding moniker with little relation to the algo’s underlying functionality. In addition, the Quantitative and Algorithmic Solutions (QAS) group here at TD maintains and publishes an extensive user’s guide along with a series of white papers on various aspects of FX market microstructure, which collectively provide customers with full transparency on how TD OpenICE works and how clients can use the platform to achieve best execution.
What features of TD OpenICE have been designed with an institutional client base in mind?
We developed TD OpenICE from the perspective of an institutional asset manager or corporate financial officer who seeks to implement an investment or trading process with specific objectives in mind. We also designed TD OpenICE from the ground up to specifically handle FX and the way currencies are traded.
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| The TD OpenICE™ Interface on FX Connect™ |
TD OpenICE is not a re-purposed equity trading platform. When you think about the types of transactions institutions execute, they are either transacting FX to fund or settle trades in international assets, seeking to hedge existing exposures or are speculating on future moves in the exchange rate. In order to facilitate such trading, TD OpenICE permits clients to execute BOTH spot and forward transactions algorithmically. We are one of the few, if only, banks that provide this capability is such a clean format. This capability makes trading far more efficient and it helps to reduce implementation and transaction costs.
What plans do you have for the future development of the platform?
We are always trying to be proactive to address the needs of our customers. At the moment we are moving towards providing more dynamic execution capabilities in TD OpenICE that will enable the algo to react and switch to market event driven types of phenomena typical seen in prices, liquidity, volatility and other factors.
We also have a great deal of functionality that we have already built into the platform, such as the ability to handle basket transactions, complex netting, cross-rate optimization and other multi-currency and multi-value date dealing scenarios. However, many clients tend to deal through third-party dealing platforms (such as Bloomberg, FX Connect and FX All) and we are limited by the types of interfaces these platforms provide clients and the types of FIX protocol or other types of messages they can transmit. We are working closely with these providers to begin rolling these capabilities out to clients. Overall, the goal is to keep things simple, intuitive and transparent.
Adding a lot of this functionality can result in an algo product that looks like the dashboard of the space shuttle. We don’t want that. We want an algo product that feels like an iPhone. Hence, a lot of the work right now is in conceiving, deconstructing and revising these features into a reduced form that provides full flexibility with minimal controls. In end, we would like our product to be a seamless and integral part of a client’s investment and trading process.
