OTAS Brings AI to TCA

Market analytics provider OTAS Technologies is rolling out an extension to its natural-language Lingo reporting platform that aims to bridge the gap between trade execution and post-trade transaction cost analysis using a new programming language.

The vendor spent 18 months developing the offering, dubbed Intraday Lingo, using the Haskell programming language, which OTAS also uses in its Lingo platform.

“It had particular qualities that made it the right tool for the job, and we probably wouldn’t have made the progress that we did with any other platform,” said Tom Doris, CEO of OTAS. “Haskell has been an academic programming language with particular properties that only recently have been gaining adoption in the industry. It fits well into this problem space of advanced artificial intelligence reasoning at a high level.”

The new offering takes data generated by OTAS’ market microstructure and analytics platform and translates it into a plain English report for the user.

“The microstructure analytics provide a visualization that human traders can use to understand the dynamics affecting their order in the market at any given time,” Doris told Markets Media. “With Intraday Lingo, all the things that were here to for privy to high-frequency traders, such as book pressure, liquidity pressure, dark volume dynamics, comparison with normal levels of liquidity, spread, volume and price actions, are available to Intraday Lingo users.”

OTAS officials decided to leverage to leverage the natural-language capabilities of its Lingo platform when they noted traders taking screenshots of their microstructure screens and emailing the annotated graphics to themselves to prepare for future TCA discussions on why the particular execution behaved the way it did.

The extension also provides traders with real-time alerts in plain English when unusual events affect the user’s executions, according to Doris.

These could be changes in volume, spread, liquidity, price action, buying or selling pressure as well as if there are indications that someone with more information has entered the market or the market makers are stepping away, he said. “The things that would take several minutes to half an hour in typical trading scenarios for the trader to become aware of. We will tell them in seconds that this is happening to protect themselves are or take advantage of an opportunity.”

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OTAS Launches Intraday Lingo Tool assists traders in meeting regulatory and best execution requirements

OTAS Technologies (OTAS), a specialist provider of market analytics and trader intelligence, today announced the launch of Intraday Lingo, an extension of its existing Lingo natural language reporting technology. OTAS Intraday Lingo pairs Lingo’s automated natural language with their microstructure charts to provide a textual report identifying intraday moves and alerts, both in real-time and historically. The tool, providing analyses for the entire trade lifecycle from pre-trade, in-trade and post-trade, provides valuable insights to traders and compliance departments alike.

With Intraday Lingo, traders are presented with an alert-driven timeline of intraday events to build a narrative of what happened during the trading day with a verification option through clicking on each entry and inspecting the microstructure. This functionality focuses on assisting traders in managing regulatory, compliance and best execution obligations by essentially creating an audit trail and tracking every decision made during each trade. With real-time alerts, the software also assists the trader in capturing risk to act accordingly.

OTAS Intraday Lingo specifically addresses best execution post-trade analysis requirements relating to MiFID II. With this innovation solution to the MiFID II compliance problem, both traders and risk officers alike can quickly and easily access OTAS Intraday Lingo reports, which summarize the important events of the trading day for a security. Additionally, OTAS Intraday Lingo provides standard TCA metrics and includes the context of the market dynamics over the life of the order, making it easier to understand the whole situation, including out of the ordinary occurrences.

“In a rapidly changing regulatory environment, we are committed to helping our clients maximize efficiency while being compliant to new regulatory requirements,” said Tom Doris, CEO of OTAS Technologies. “Today’s traders are already faced with an immense amount of data to sift through while making trading decisions. Traders make hundreds, if not thousands of trades daily, sometimes with only a fraction of a second to make those decisions.”

Having OTAS Intraday Lingo means that risk and compliance teams can review trades in a few seconds, rather than minutes or hours. Instead of needing to wade through tick data and fill logs, it can be read in a simple plain English report that captures all the important information. Traders can go back and recreate market conditions that day to show why those decisions were made for regulatory and compliance requirements. Intraday Lingo keeps OTAS clients ahead of the forthcoming regulatory mandates to ensure they can continue to trade at their best.