Why are increasing numbers of TD Securities clients’ considering algorithmic FX execution and what attributes does the firm have that put it in a good position to meet this demand?
The FX landscape has become more fragmented in recent years. In this climate, algos provide an alternative execution method that help to reduce market impact for clients. Our clients are utilising algos to achieve greater execution efficiency and reduce trading costs.
TD is well-placed to meet client demand due to our range of algo strategies. By blending a suite of internal and third-party strategies, TD can cater to a wide array of buy-side needs.
What types of client are showing interest in your FX algos and what key benefits do they get from using them?
We have seen the most interest in our algo suite from the Real Money and Corporate client base. The key benefit to clients is being able to access different liquidity pools when executing, including both internal and external pools.
Key benefits can vary based on the algo type our client is using, for example if they choose to place an algo into TD’s XTX implementation shortfall algo they are aiming to minimise overall slippage vs. arrival price.
What steps are you taking to enhance your FX algo suite and optimise the availability of the strategies you offer?
We continue to invest in the development of our algo offering, with decisions driven off feedback from both external clients and internal trading desks utilising the algos.
Within our existing algo suite we are continually adding new functionality to enable clients to further tailor their execution. Extensive work is being undertaken to improve the availability of our algo suite across a wider range of platforms and homogenise our offering in this regard, for example we have recently connected into Charles River.
Zooming in on our own internal algo strategies and liquidity, our quantitative teams are developing our pricing models to improve our internalisation of algo orders. This will improve anonymity and market impact over the course of algo execution. In future this will enable us to offer clients access to additional curated client liquidity pools.