Cowen Launches Enhanced Algorithmic Trading Solution
“Inaccessible Liquidity Adjustment” to help institutional clients navigate evolving market structure impacted by higher rates of retail trading
NEW YORK, March 25, 2021 (GLOBE NEWSWIRE) — Cowen Inc. (NASDAQ:COWN) (“Cowen” or the “Company”) today announced it has launched a new algorithmic trading solution, the “Inaccessible Liquidity Adjustment,” to address fundamental shifts in the US market structure and help clients accurately navigate the ever-evolving investment landscape.
The mix in trading volumes driven by retail and institutional investors has caused a fundamental shift in U.S. equity markets over the past two years. Cowen has found that individual stocks with higher rates of inaccessible liquidity, often driven by retail trading, tend to have higher execution costs, which can have measurable impacts on institutional investors. Cowen’s new algorithmic trading solution directly addresses the market dynamic related to increased volumes of retail trading which impact single-stock execution, mitigating increased costs for its clients.
Jennifer Hadiaris, Head of Global Market Structure at Cowen, said, “As we continually evolve and enhance our offerings to help our clients outperform within dynamic global market structures, we are incredibly excited to offer clients the ability to opt in to ‘haircut’ participation rates to account for inaccessible liquidity on a stock-by-stock basis. The ‘Inaccessible Liquidity Adjustment’ can automatically adjust to help clients avoid pursuing inaccessible volume in stocks where rates of retail trading may be higher.”
Hadiaris continued, “This offering is in line with our unconflicted commitment to the institutional business. The most recent algo update is part of our ultimate goal to present solutions to market structure challenges and to deliver consistent, performance-driven results for our clients. We also understand that each client is unique, which is why the Inaccessible Liquidity Adjustments – similar to Cowen’s other execution services – is customizable to fit clients’ individual needs.”
Cowen’s new solution offers clients the option to adjust their trading for inaccessible liquidity on a single-stock basis as they execute orders in its algos. On a weekly basis, Cowen will calculate the percentage of inaccessible liquidity in each U.S. security using the prior 3 months’ FINRA and off-exchange data. Clients will then be able to opt in to directly adjust participation rates in the algos, reducing aggression on a single stock basis to account for that specific stock’s rate of inaccessible liquidity. Clients can apply the Inaccessible Liquidity Adjustment to certain strategies, or they can apply it on an order-by-order basis.
For more information about Inaccessible Liquidity Adjustment, click here.
About Cowen Inc.
Cowen Inc. (“Cowen” or the “Company”) is a diversified financial services firm offering investment banking services, equity and credit research, sales and trading, prime brokerage, global clearing, commission management services and actively managed alternative investment products. Cowen focuses on delivering value-added capabilities to our clients in order to help them outperform. Founded in 1918, the Company is headquartered in New York and has offices worldwide. Learn more at Cowen.com.
Source: Cowen Inc.