Transaction Cost Analysis (TCA) has evolved significantly in recent years. In its early days, with limited tools and methods available for detailed cost analysis, the focus of TCA was on simple measures of trading costs, such as commissions and fees, with basic benchmarks like VWAP (Volume Weighted Average Price) and TWAP (Time Weighted Average Price) used to evaluate execution quality. As the recognition of implicit costs (e.g., market impact and slippage) grew, and as regulatory changes such as Reg NMS and MiFID further emphasised the need for best execution and transparency, more sophisticated TCA tools and methodologies emerged.
Advancements in technology and data analytics have led to more detailed, granular, and multi-dimensional TCA, which now considers factors such as order size, market conditions, and timing. Buy-side firms are increasingly using TCA to assess broker performance and optimise trading strategies, integrating real-time data for immediate feedback on trading performance. There is now a greater emphasis on pre-trade, intra-trade, and post-trade analysis, with the growth of custom benchmarks and sophisticated statistical models to better capture trading costs.
TCA is now being more broadly adopted across different asset classes, including fixed income, derivatives, and FX. Machine learning and AI are being incorporated into TCA models for predictive analytics, improved accuracy, and adaptive algorithms. The future of TCA will likely continue to innovate, leveraging new technologies and expanding its application across diverse financial instruments and markets.
TradingTech Insight has compiled a list of the top TCA solutions to consider in 2024. This list is based on a combination of A-Team Group research and entries, along with voting by our readership of TCA solution providers in our recent TradingTech Insight Awards USA and TradingTech Insight Awards Europe.
OneTick
Winner of Best TCA Solution 2024 in both our Trading Tech Insight Awards (Europe) and Trading Tech Insight Awards (US)
OneTick’s Best Execution (BestEx) and Transaction Cost Analysis (TCA) solution offers comprehensive tools for evaluating and optimizing trading performance. It measures execution algorithm performance, breaking down results by market and order characteristics, and checks for spread capture and front-running. The solution compares execution venues, includes venue-specific fees, and provides detailed slippage and spread capture metrics. It supports regulatory reporting (RTS 27/28, 605/606) and offers customizable TCA reports. Users can visualize trends, identify outliers, and analyze client flow toxicity. The hosted research environment and TCA API facilitate market data analytics with pre-configured functions and a powerful Python API. Additionally, pre-trade TCA insights and machine learning capabilities enhance decision-making and model management.
Adroit Trading Technologies
Cross-asset TCA is native to Adroit’s buy-side EMS, capturing the entire market context at each step of voice and e-traded orders, from order creation and trade execution to post-trade. With a single click, users can generate reports to demonstrate best execution and fairness across accounts. Adroit’s pre- and post-trade analysis incorporates disparate data types, including streamed quotes, firm responses to RFQs, evaluated prices, publicly reported trades, and ETF prices. Adroit’s focus is on OTC FICC, across cash and derivatives.
big xyt
big xyt’s Open TCA is an “analytics as a service” solution, built on a very powerful and efficient technology stack, and is accessible via web-based front-ends and APIs where derived data can be extracted and additional analysis can be performed. Pre- and post-trade TCA has to manage increasingly complex datasets at previously unmeasurable levels of granularity. This is a challenge for every buy- and sell-side firm.
big xyt harvests, stores and normalises granular data sets across 120 global markets (across equities, ETFs, listed derivatives and FX). With Open TCA, users can interrogate those datasets to estimate clients’ pre-trade costs, benchmark their trading when they executed, and calculate the cost when they did not.
As a privately owned company with no trading activities, big xyt is an unbiased and objective provider of data analysis. Clients and regulators see independence as an essential ingredient to avoid conflicts of interest or unnecessary leakage of information.
Bloomberg
Bloomberg BTCA delivers robust multi-asset transaction cost analysis harnessing Bloomberg’s global market data across a wide range of trading benchmarks. BTCA offers impactful trading insights that help clients create and monitor optimal trading and execution strategies. Using BTCA’s powerful exception-based workflows, traders can efficiently meet a firm’s compliance and execution policies through granular analysis of the entire trade flow life cycle.
eflow
eflow’s TZBE platform is a highly configurable platform that automates best execution tests, enriches trade data with market data curated from more than 250 sources, and generates highly granular TCA reporting. TZBE also generates valuable commercial insights by highlighting how a firm’s trading strategy can be executed more effectively.
The system automatically ingests data, tests against all core industry benchmarks, and reports on all instrument types and asset classes. Customisable parameters can be refined to mirror specific trading strategies, automatically accounting for variables and reducing false positives. TZBE also includes data archiving and indexing that complies with MiFID II and all other global regulations as standard, ensuring that you are one step ahead of your reporting obligations.
KX
KX accelerates the speed of data and AI-driven business innovation. Time series and vector data management are at the heart of the company’s products, which are independently benchmarked as the fastest on the market. KX’s customers process data at unmatched speed and scale and empower quantitative researchers and data scientists to launch, configure, run, and scale the most important capital markets analytics and AI workloads, such as options pricing, transaction cost analysis, and back-testing
KX technology enables the discovery of richer, actionable insights for faster decision making which drives competitive advantage and transformative growth for our customers.
https://kx.com/solutions/trading-analytics/
LIST
LIST’s Transaction Cost Analysis (TCA) is part of the ION LookOut product suite. ION LookOut TCA is designed to calculate over 80 key performance / cost metrics (KPM) to provide post-trade execution performance analytics to buy-side and sell-side investment firms. The calculated KPMs include execution statistics like participation rates, execution style, spread capture and venues distribution; execution benchmarks like VWAP and implementation shortfall; market status like prices, momenta, ADV, volatility, slippage, and reversions; and implicit costs like delay, spread, market impact, timing, and opportunity. ION LookOut TCA supports pre-configured and customizable reports that can be exported in various formats.
https://www.list-group.com/list-lookout/
Quod Financial
Quod Financial’s TCA stands out as one of the best in the capital markets due to its comprehensive real-time analytics and machine learning capabilities. The platform provides actionable insights, enabling traders to monitor and optimize execution performance instantly. Its unique integration of TCA outputs into OMS/EMS systems allows for immediate adjustments and improved trading strategies. Quod’s TCA offers pre-trade and post-trade analysis, robust benchmarking, and compliance with MiFID II regulations. The platform’s ability to manage big data and provide predictive analytics ensures informed decision-making, enhancing overall trading efficiency and performance. Quod Financial’s TCA features a powerful dashboard for detailed visualization and reporting, making it easier to track market impact, slippage, and hit ratios. Additionally, its AI/ML-driven recommendations for EMS configurations and strategy adjustments further enhance trading outcomes, providing a significant competitive edge in the capital markets.
https://www.quodfinancial.com/tca-best-execution-reporting/
S&P Global
S&P provides an independent TCA tool that provides global empirical performance data to help measure and manage best execution across multiple asset classes. Equity, FX, Fixed Income, CDS. Loans. MMI, Listed Futures and Options as well as OTC derivatives. Our tool combines execution, algorithmic, venue and smart order evaluation analytics to enhance trading-related execution quality management and reporting capabilities. Evolving market practices and global regulations such as MiFID II have increased scrutiny over best execution practice. As the concept of best execution has developed from the best available price at a point in time to a more holistic view of the investment process, the need to measure and manage increasingly complex trades and execution processes has grown significantly.
Our TCA platform meets the rigorous performance verification needs of execution providers’ trading customers. Our solution allows for actionable insight to enhance and synchronize trading related execution quality and delivers trading intelligence valued by trading desks. 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 accurately differentiate the performance of alternative execution channels as well as being able to fulfil an extensive compliance and regulatory use case. Using best in class benchmark data sets in asset class where price visibility is challenging, S&P also provides proprietary pre trade models as well as deep and wide peer data sets to provide context on trading activity.
https://www.spglobal.com/marketintelligence/en/mi/products/transaction-cost-analysis.html
Spacetime
Spacetime’s TradeFabric platform is a trade intelligence and insights platform designed to augment trader decision making throughout the trade lifecycle. It goes beyond traditional TCA services with a highly visual interface for flexible in-depth analysis, and real-time adaptive analytics for pre and in-trade insights that provide context and situational awareness of where and when traders need it most.
Sell side desks can maintain coverage levels more efficiently and respond quickly to potential issues and opportunities on client orders, while Buy Side desks can restore information flows, liquidity sourcing, and alerting they often lose when working an order themselves.
Trading Technologies
Trading Technologies places a strong emphasis on TCA across its platform from the newly acquired Abel Noser suite of multi-asset TCA products to the dynamic implementation of TCA into the TT Premium Order Type algo process managed by TT’s Quantitative Trading Solutions (QTS) unit. TCA is not only available for TT clients post-trade but employed to improve/optimize the algo suite as part of its comprehensive data science ingredient in the product’s design and application.
TT’s Abel Noser Solutions is the leading global provider of TCA solutions. Its secure universe of trade data and analysis helps hundreds of client firms achieve best execution/measure trading performance/evaluate strategies/compare costs/identify performance improvements in equities, fixed income, options, FX and futures. The Trade-Zoom post-trade multi-asset solution allows clients to benefit from sophisticated analytics as well as customizable reports and benchmarking against the largest universe of annualized market and trade data.
https://www.tradingtechnologies.com/
https://www.abelnoser.com/
TS Imagine
TS Imagine’s TCA empowers customers to optimise liquidity and make timely, accurate trading decisions with complete visibility into execution performance across all counterparties and venues. Users can tailor analytics using over 25 benchmarks, 50 market data venues, and various visualisation tools, enabling teams to make informed decisions regarding broker and algorithm selection, timing, and strategy. This leads to reduced costs and maximised opportunities through in-depth, data-driven performance insights. Customers can also rely on TS Imagine’s team of data scientists and analysts to manage their data, allowing them to focus on generating alpha and maximising returns.
https://tsimagine.com/data/transaction-cost-analytics/
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