Investment Technology Group (ITG), a financial technology firm, has introduced new equity index futures trading capabilities in its portfolio algorithm, Dynamic Implementation Shortfall (IS).
The algorithm can now execute baskets containing any mix of both stocks and equity index futures. Stocks and futures contracts will execute simultaneously in a risk- and dollar-controlled manner. ITG said that, with the new functionality, Dynamic IS is powerful in trade situations where the execution of futures contracts is dependent on the trading of stocks, such as replacing a fund’s equitized cash position with stock positions, and executing large portfolios hedged with futures contracts.
Dynamic IS with futures capability is available via ITG’s execution management system, Triton. It is an enhancement to ITG’s existing derivatives trading capabilities, which offer multi-asset functionality across a variety of trading applications as well as APIs for black-box DMA strategies in the futures and options markets.
Hitesh Mittal, head of liquidity management at ITG, said: By combining execution capabilities across asset classes, Dynamic IS simplifies and reduces the risk of trading stock portfolios in concert with index futures. This new capability gives traders unparalleled control over portfolio execution.