Picking the right venue can cut costs

A new report from Greenwich Associations – US Equities: Venue Analysis Drives Next Generation TCA – highlights the growing importance of the choice of venue in cutting total investment costs. The report says that 78 percent of equity traders indicate they use TCA (transaction cost analysis) as part of their investment process and 45 percent who use venue-specific TCA have made changes to their order-handling practices.

While in the past it was sufficient to analyse the aggregation of trades against a specific benchmark, institutional traders are now tasked to dig deeper into performance on the venue level.

“TCA vendors who integrate insightful venue analysis tools will have the opportunity to pick up market share,” says analyst Richard Johnson.