BNY ConvergEx, a provider of investment technology solutions, has launched TOPx, its new transition optimization algorithm.
TOPx will enable BNY Global Transition Management to generate customized execution strategies that align with the investment objectives of a client’s portfolio to better protect the value of assets during changes in investment strategy.
TOPx is designed to minimize implementation shortfall by focusing on the trade-off between market impact and timing risk by simultaneously identifying the optimal trading schedule for each stock in the portfolio. As the trading day unfolds and trading conditions change, TOPx continually re-optimizes the trading schedule of each individual stock to minimize the overall transition cost. By dynamically monitoring market depth and comparing real time pricing with predicted contributions to tracking error, TOPx produces the most efficient trade schedule for each security.
The addition of TOPx significantly strengthens the BNY Global Transition Management product set. TOPx will be used in tandem with the advanced transition analytic tools and comprehensive hedging strategies that BNY GTM already employs to form a risk management platform dedicated to ensuring the value of a client’s assets during the transition process.