THE GREAT ORDER FLOW DEBATE

摘要

As transaction cost analysis (TCA) tools emerge on the desktop, buy-side traders increasingly are scrutinizing the quality of their executions — both to dissect their own trading perform-ance and rank their brokers. But, while many firms use TCA to help direct their order flow, there are questions about the prudence of relying solely on these metrics to select brokers. Meanwhile, the trend toward measuring execution quality is accelerating as buy-side traders take more control over their executions through direct market access (DMA) and algorithmic trading strategies. While there are regulatory pressures from pension plan sponsors and the need to comply with best-execution obligations from the SEC, it is, in large part, this shift in control from the sell-side block desk to the buy side's own trading desk that is driving the current TCA momentum.