The growing demand for complex trading products has offered Bank of America (NYSE:BAC) increased opportunities to expand its international algorithmic trading platform, and there latest expansion is into Brazil, where they’ve adjusted it to work with Brazil’s Bovespa.
In a press release, head of Latin America Equities at Bank of America, Steve Schneider said, “Interest and liquidity in Brazilian stocks have risen significantly this year and as a result our international investor clients are asking for more sophisticated trading tools to access this market. We are also seeing increasing demand from our local high-touch trading clients, many of whom are now looking forward to using these new trading tools in Brazil.”
Included with their trading platform will be the ability to implement VWAP and shortfall. Bank of America says that with the VWAP performance, it increased by almost 20 percent over a three-month period based on several hundred thousand orders.
According to the press release, users can then use these parameters to “express views on alpha horizon, momentum vs. mean reversion, and stock performance in absolute or relative terms.”
This is one of those products I like, as it would be difficult to compete against, and its flexibility and continued evolution allows the ongoing tweaking of it to improve its performance and adapt itself to whatever market Bank of America is targeting. In other words, they have a strong competitive advantage and a pretty good moat around this to protect against the entrance of competitors in the market. It also helped them grow in areas not related to fees and interest rates, which are highly out of favor with the public, and thus, politicians at this time.
The company says it has already enhanced the algorithmic trading suite over 50 times since earlier in the year, which has increased its quality and performance for its users.
