Knight Capital Group, a global financial services firm that provides market access and trade execution services across multiple asset classes to buy- and sell-side firms, has launched Oasis, a new smart order execution algorithm that sources small- and mid-cap liquidity, for European equities.
Oasis uses a new logic to source liquidity in thin and difficult-to-trade names with increased efficiency and opportunities for price improvement. The strategy evaluates liquidity, volatility, price trend, momentum and other characteristics in real time to determine the best sources of liquidity to help minimize market impact. Oasis also includes anti-gaming procedures such as continuous monitoring for adverse trading behaviour to further help minimize information leakage.
Oasis is a new addition to Knight’s algorithmic suite for European equities. The algorithms are powered by FAN, a smart order execution algorithm which sources liquidity from multiple exchange and MTF destinations simultaneously while adapting to market conditions in real time and re-circulating orders to where executions are occurring.
Bradley Duke, managing director at Knight, said: “Knight does not subscribe to a one-size-fits-all approach. That philosophy has led Knight to become an innovator in creating new categories of algorithms, including situation-specific algorithms like Oasis. Higher volatility, reduced liquidity and wider spreads are just a few of the challenges associated with trading small- and mid-cap stocks. Knight has deep expertise in these often thinly traded names as well as in the complexities of trading across the fragmented European marketplace.”