Portware

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Quietly last quarter, execution management system provider Portware launched its Alpha Vision automated algorithmic strategy optimizer platform.

So far six yet un-named asset managers, two hedge funds and two pension funds are using the new system to develop and execute trading strategies using third-party trading algorithms available to the respective firms.

Once a trader enters a parent order, Alpha Vision analyzes the firm’s historical trade database, or a generic one database provided by Portware, to find similar executions. Then it develops a trading strategy based on this data using 45 different factors in its decision-making process.

Once the trader accepts the strategy, Alpha Vision executes and monitors the strategy’s performance. After each child order transacts, that performance data is fed back into the system to hone the strategy further. If a change is necessary, the platform tweaks the strategy while duly logging those changes.

To prevent the strategy from spiraling out of control if the markets take an unexpected turn, the platform knows when to stop trading and alerts the user. The trader then can instruct the system to develop a new strategy base on the new market conditions and execute the outstanding order against it.

According to Portware CEO Alfred Eskender, Alpha Vision’s early adopters saw the platform updating its trading strategy on average 42 times compared to the typical four tweaks that a human trader might make after the commencing an execution strategy. This difference in strategy monitoring has translated into a 17-basis point improvement in executions done via the platform, he claims.

The offering might sound like a “trading desk in a box,” but Portware officials are quick to refer to it as “more of a co-pilot than a pilot.”

Although the system may not replace the trader, the performance improvements it provides just might alter some commission-sharing agreements as research brokers could use it to improve their executions and attract more direct client order flow, say vendor officials.

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In a private agreement announced today, officials from Atrias Group, formerly known as Pipeline Financial Group, say that execution management system (EMS) provider Portware has agreed to purchase its Alpha Pro trading algorithmic engine in deal slated to close sometime this quarter.

“Aritas’ technology assets are highly complementary and add advanced artificial intelligence and commission optimization tools to Portware’s core offerings,” said Portware CEO Alfred Eskandar in a prepared comment.

This is definitely a good deal for Portware as it adds new pre-trade bells-and-whistles to its trading platform.

For Atrias, however, it leaves the firm with its broker-dealer and block-market operations, the core businesses that proved difficult for the firm’s former management.

When ITG and Liquidnet veteran Jay Biancamano came on board as executive chairman last November, he faced a monumental task of turning around the business. A short two months later, the company lost its tarnished name and gained its new Atrias brand. It also turned its attention to further developing its Alpha Pro platform.

With its sale, what is left for Atrias?

UPDATE:

According to reporting from Traders Magazine, it is to shut up shop and go to work for the company that just purchased your assets.

 

 

 

 

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