BestX Case Study: Monitoring Trends in Performance

This brief article continues our series of case studies for the practical deployment of the BestX execution analytics software. To receive the full case study please contact BestX at contact@bestx.co.uk. Please note these case studies should be read in conjunction with the BestX User Guide, and/or the online support/FAQs. The focus of this second case study is the monitoring of trends in execution performance, a key component of the feedback loop required within a best execution policy. The BestX Trend module allows the construction of tailor-made analyses of trends in any of the different metrics that BestX computes, thereby providing flexibility to add value to any institution’s specific policy and process.

Monitoring execution performance over time, and learning lessons to help refine the policy and process further, is not simply something to satisfy any regulatory or fiduciary responsibilities. In our view it is a fundamental part of improving performance to improve returns, and can be applied to many constituents of the execution process, for example:

  • Monitoring liquidity provider performance over time, by product, by ccy pair, by trade size, by time zone etc
  • Monitoring algo product performance
  • Assessing how different venues perform over time
  • Are they any market structure changes occurring that are resulting in different execution methods performing differently e.g. RFQ vs streaming prices?
  • Is market liquidity changing over time, e.g. is my business creating more impact than it used to?

We explored the concepts of feedback loops and marginal gains in a previous article, published in Oct 2016. This case study helps put concepts into practice using the BestX software.

To receive the full case study, please email us at contact@bestx.co.uk