Intra-Trade TCA

The Finance Hive: Digital Café, 22nd February
Back with a bang! Discover the key takeaways from our latest FX buy side Café…

Our members recently came together on Zoom for the first FX Café of the year, looking specifically at intra-trade TCA and best execution.

We were joined by 47 senior members from our US and European communities, equipped with a wealth of knowledge, experience and unique perspectives. Join us as we delve into some of the many actionable insights from the discussion…

The Need for Standardisation

The group began the discussion by addressing an important question: how do you define intra-trade TCA?

Members defined this as real-time execution analysis, ensuring that your strategy performs in line with forecasts and objectives. When used effectively, intra-trade TCA can help you to keep on top of changing market dynamics, adapting quickly to new conditions.

However, members emphasised the need for standardisation in this area as counterparties continue to use different data and metrics for intra-trade TCA. It was also agreed that some metrics for Risk Transfer Price are far from realistic, leaving members searching for credible third-party providers to improve data quality.

Build vs. Buy

Members explored the difference between buying intra-trade TCA tools or building your own solution. If you do decide to buy, you are tied into what your partner does and ultimately, what they want to show. 

Additionally, benchmarks from providers may pose challenges. The group stressed the importance of understanding the benchmarks you’re using, particularly when it comes to RFQs and algo performance. To truly determine algo performance, members suggested that reputable providers are likely to remain active whilst a trade is ongoing, proposing practical changes to parameters to improve outcomes. 

For greater flexibility and control, choosing the right partner is absolutely essential. Members referenced New Change FX and Tradefeedr as examples of solution providers that can amalgamate trade data and help you to benchmark performance, thus improving overall operational efficiency.

BestX, Cortex FX, Cürex Group and Jupyter Notebook can also support seamless intra-trade TCA in the eyes of our members. The best tools for you will undoubtedly depend on your current desk setup (are legacy systems in use?), cost, desired implementation time and other important factors.

Getting Team Buy-In

Results can vary quite drastically between pre-trade and intra-trade, meaning you don’t always have a concrete answer on what to do next. For this reason, some members prefer to focus their attention on quarterly or annual numbers, looking for patterns beyond intra-trade TCA.

Some members also expressed concerns surrounding team buy-in. Traders may worry they are going to be seen as villains due to intra-trade TCA and therefore, feel less inclined to use it. Addressing any internal fears and setting clear expectations is key.

On the whole, members feel that intra-trade TCA has the potential to drive automation, freeing up time for traders to focus on high-priority tasks. Traders will still be needed to oversee this processespecially in times of volatilitybut intra-trade TCA may help to push automation forward and enhance workflows. Although, this comes back to data. TCA will feed automation, but more extensive and reliable data is needed for TCA…

Join Us Next Time!

We’ll be continuing the conversation at our FX US Members Meeting, so make sure you get involved!

It’s been great to catch up with our US community and get their insight into the pressing issues within and around FX. I can’t wait to see it all come together next month! We will be bringing together FX industry leaders to drive market and tech innovation, and it will be our best meeting yet!”

Becky Moore, Community Manager, FX and FI, The Finance Hive

Discover More…

Our FX US Members Meeting, now in its 6th year, is dedicated to connecting our members with buy side peers facing similar challenges, alongside third-party, Hive Recommended technology providers who can help them with their FX roadmaps. Each member will receive a tailored agenda, covering issues at the very heart of our FX trading network.

This year, our FX US Members Meeting will be taking place at Hyatt on the Hudson, Jersey City—with enviable views and highly focused discussions.

Book your place today by clicking on the buttons below…