Transaction Cost Analysis (TCA)
Transaction Cost Analysis (TCA)
What is Transaction Cost Analysis (TCA) and why is it important?
Transaction Cost Analysis (TCA) is a critical tool for institutional investors looking to refine their trading strategies and enhance execution efficiency. At its core, TCA assesses the costs associated with trading, encompassing both explicit costs—such as commissions and exchange fees—and implicit costs, including market impact and opportunity costs. Understanding these components is essential for optimizing trading performance, as TCA empowers traders to evaluate their execution against benchmarks and identify areas for improvement.
By integrating TCA into your trading strategy, you can not only reduce costs but also enhance overall execution quality, ensuring that you maximize the value of every trade.
Measure and Manage Best Execution
Our multi-asset Transaction Cost Analysis (TCA) tool combines your bespoke trade data with our industry-leading market data sets to produce best-in-class TCA reporting, metrics and benchmarks. This solution offers three essential benefits to both buy-side and sell-side firms:
- Actionable Insight into execution quality and trading costs
- Regulatory Compliance
- Optimizationof Alpha to maintain competitive advantage
Evolving market practices and global regulations such as MiFID II have increased scrutiny over best execution practices. As the concept of best execution has shifted from merely achieving the best available price at a given moment to a more holistic view of the investment process, the need to measure and manage increasingly complex trades and execution processes has grown significantly. This underscores the importance of robust transaction cost analysis.
For buy-side firms, our advanced TCA products provide the key trading intelligence for verifying execution quality across a variety of benchmarks, from “high touch” to direct market access. Our comprehensive TCA products support in achieving optimal execution.
For sell-side firms, our sophisticated evaluation analytics for algorithms and smart order routers represent the next generation of execution quality reporting, delivering valuable trading intelligence that enhances their transaction cost analysis capabilities.
TCA by Asset Class
- Trading Analytics | Equity TCA Provides global empirical performance data to help measure and manage best execution through equity transaction cost analysis. The tool combines execution, algorithmic, venue, and smart order evaluation analytics to enhance trading-related execution quality management and reporting capabilities. Our service provides the metrics necessary to streamline performance-based order routing and help with optimal trade strategy selection. In addition, toxic liquidity and front-running surveillance tools differentiate the performance of alternative execution channels.
- Trading Analytics | FX TCA Verify the quality of foreign exchange transactions and manage dealer relationships with confidence. Our advanced FX trading analysis solution provides actionable answers to challenging questions regarding foreign exchange quality. Designed by traders, transaction cost analysis for foreign exchange supplies key trading intelligence to help verify execution quality across your counterparties. The FX TCA platform employs timestamp dependent benchmarks, full day measures, WM rate benchmarks, and a variety of client-specific metrics designed to fit your investment strategy.
- Trading Analytics | TCA for Fixed Income Facilitates the regular supervision and rigorous review of the fixed income best execution process, which is aimed at increasing the transparency and efficiency associated with trading bonds. Our service provides the industry with trade performance data that is needed to support a fixed income best execution process. To comply with the regulatory requirements for best execution, firms need reliable data to benchmark their trades against. Trading activity is benchmarked using our independent, multi-sourced evaluated bond pricing providing transparent and accurate fixed income transaction cost analysis.
- Trading Analytics | TCA for CDS Our TCA for CDS service provides transaction cost analysis and best execution reporting for single name CDS and Index CDS instruments. The service uses our independent global pricing service, which provides benchmark data for standard as well as broken dated tenors.
- Trading Analytics | TCA for Loans and Money Market Instruments Our service also offers transaction cost measurement, analysis, and reporting for a wide range of loan and money market instruments. The service uses our independent global pricing service, which provides enhanced transparency for benchmark prices, aiding in comprehensive transaction cost analysis for loans and money market instruments.
- Portfolio Valuations | Best Execution: OTC Derivatives Our best-in-class OTC derivatives valuation data can help firms comply with best execution requirements through the provision of time-stamped valuation data for monitoring intraday and historic transaction costs. We can seamlessly calculate OTC trade slippage, which is the difference between the executed and expected price of transactions, supporting robust OTC derivatives transaction cost analysis.
TCA Products & Solutions
Factsheets
Download Trading Analytics – Future TCA
An independent Futures TCA tool that provides global empirical performance data to help measure and manage best execution.
Download Trading Analytics - Algorithmic Trading Insights
Independent Algorithm and Strategy Insights from a Global Peer
Download TCA services for fixed income
Independent Fixed Income TCA tool that provides global empirical performance data to help measure and manage best execution
Download Trading Analytics – Fixed Income Peer Universe
A tool to compare your Fixed Income execution quality against industry peers
Download TCA equity services for buyside
Independent Equity TCA tool that provides global empirical performance data to help measure and manage best execution for buyside
Download TCA equity services for sellside
Independent Equity TCA tool that provides global empirical performance data to help measure and manage best execution for sellside
Download TCA services for FX
Independent FX TCA tool that provides global empirical performance data to help measure and manage best execution
Download TCA loans and money market instruments
Independent loans and money market TCA tool that provides global empirical performance data to help measure and manage best execution
Download TCA for credit default swaps
Transaction cost analysis and best execution reporting for single name CDS and Index CDS instruments
Download Best Execution for OTC Derivatives
Independent, multi-contributor, validated service providing post trade performance data to help measure and manage best execution
Transaction Cost Analysis - Related Products
Customers
- Investment managers
- Pension plans
- ETF providers
- Risk and compliance officers
- Investment consultants
- Transition managers
- Algorithmic trading firms
- Investment banks
Awards
Best TCA System Provider Award
Outstanding TCA Provider Award
Waters Rankings - Highly Commended
Thought Leadership Insights
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