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BAML Launches New Pairs-Trading Algorithms

Bank of America Merrill Lynch (BAML) has added new pairs trading strategies for equity securities, the latest complement to the company’s suite of global algorithmic trading products.

Similar to other BAML algorithms, the pairs strategies leverage the firm’s infrastructure and technology, including its smart order router, enabling access to all major liquidity sources and low latency execution.

In addition, the algos contain key risk controls across four strategies: Spread, Ratio, Inverse Spread and Inverse Ratio. They are available directly via several leading order management systems.

Dan Nachtman, product manager and director of execution services at BAML, said: “Our trading desks already are using these algos with great success. We think our clients will quickly realize the quality of our new offering and adopt them as core strategies.”

Michael Lynch, head of Americas execution services at BAML, said: “Clients continue to ask us about pairs and other market neutral strategies like statistical and risk arbitrage. By using our new pairs algo functionality, clients can quickly and easily implement these strategies.”

BAML is a global provider of equity and options trading, sales and research services to the mutual funds, hedge funds, broker-dealers, pensions, endowments and other institutions.