The New Math of Building an Electronic Trading Business

BestEx Research launched its AMS One platform on June 9. Traders Magazine sat down for a candid conversation with Hitesh Mittal, Founder and CEO, to talk about why competing on execution has been so hard for all but the top few firms, why it requires a focus on market structure and research, and how AMS One solves the problem.

What is AMS One?

AMS One is a SaaS platform that helps banks and brokers launch or upgrade their algorithmic trading business across global equities and futures markets. The platform comes with our execution algorithms, which offer highly competitive performance versus tier 1 banks, and an algo customization tool that an electronic trading desk can use to build and customize their own algorithms. But running a successful execution business requires more than that; this platform is an end-to-end solution that offers not just algorithms but all the tools to manage and service them. For example, it comes with an EMS and a TCA platform which create a seamless experience for electronic trading desks and quants. The platform is fully managed, which brings infrastructure cost down to zero. Clients can launch their business in a matter of weeks or  expand their current regional business to other markets easily.

Algorithmic trading has been around a long time, and you built and managed platforms for the buy side and the sell side before founding BestEx Research. What has changed since then, and what hasn’t?

I built the global equities algo product at ITG, which was really a pioneer in the field, then moved to the buy side as head of advanced systematic trading at AQR where I built the firm’s multi-asset algorithms in house. What hasn’t changed is that great execution is still hard to deliver across global, multi-asset markets. It takes constant research and a close eye on changing market structure. What has changed is the bar for quality. A functional set of algorithms used to be enough to compete, but today it isn’t. Most large buy-side firms have hired quants who measure and reward brokerage firms on performance and many of them also demand bespoke solutions. That trend started in US equities and is spreading globally and across asset classes. Execution today is half about algorithm quality and half about the customization and consultation wrapped around it.

Read the full interview here

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