Imperative Execution - Detailed Review
Finance Tools
Imperative Execution - Product Overview
Imperative Execution Overview
Imperative Execution is a financial technology company that has made significant strides in the finance tools AI-driven product category, particularly through its innovative trading platform, IntelligentCross.Primary Function
The primary function of Imperative Execution is to improve market efficiency by optimizing trading performance using artificial intelligence (AI). IntelligentCross, its flagship product, is an Alternative Trading System (ATS) that employs AI to minimize market impact and maximize liquidity for institutional investors.Target Audience
The target audience for Imperative Execution’s products is predominantly institutional investors, including hedge funds, asset managers, and other large-scale market participants. These entities benefit from the platform’s ability to reduce trading costs and enhance execution quality.Key Features
Here are some of the key features of IntelligentCross:AI-Powered Matching
IntelligentCross uses a closed-loop measurement-optimization-calibration AI cycle to continuously improve and adapt to changing market conditions. This process optimizes order matching to minimize price impact and maximize liquidity.Optimized Price Discovery
The platform matches orders at discrete times, within microseconds or milliseconds, to maximize price discovery and stability after trades. This approach helps in achieving stable quotes and reducing market impact.ASPEN and Midpoint Matching
IntelligentCross offers two main matching protocols: ASPEN (Adverse Selection Protection Engine) and Midpoint. ASPEN enables makers to post larger sizes and tighten spreads, while Midpoint trades occur at calibrated times to ensure maximum price stability after the trade.Multi-Horizon Market Response Measurement
The platform tracks trade-by-trade market responses to inform future matching decisions, ensuring continuous improvement in trading performance.Support for Various Order Types
IntelligentCross supports a wide range of order types, including midpoint orders, display orders, dark orders, and more. This flexibility allows it to be seamlessly integrated into various trading algorithms.Performance Metrics
The platform has demonstrated significant improvements in trading metrics, such as a 22% average spread improvement versus the National Best Bid and Offer (NBBO) and a 76% lower market impact compared to exchange midpoint averages. By leveraging AI and advanced matching logic, Imperative Execution’s IntelligentCross aims to make trading more efficient and cost-effective for its users. Imperative Execution - User Interface and Experience
User Interface
The user interface of IntelligentCross, while not explicitly described in detail, is integrated into the broader trading ecosystem. Here are some inferred aspects:
- Integration with Existing Systems: IntelligentCross is designed to be compatible with existing trading infrastructures. It allows registered US broker-dealers to use the platform without needing to change their current workflows or systems.
- Order Matching and Execution: The platform uses AI to optimize price discovery and matches orders near-continuously, which suggests a streamlined and efficient interface for executing trades. However, specific UI elements such as screens, buttons, or dashboards are not described.
Ease of Use
- Plug and Play: IntelligentCross is described as “plug and play,” meaning that users do not need to alter their existing trading processes or code to start using the platform. This indicates a user-friendly approach that minimizes the learning curve for traders.
- Adaptability: The AI-driven matching process adapts to market conditions, which could imply that the interface is intuitive and does not require manual adjustments from users for optimal performance.
Overall User Experience
- Performance Metrics: Users of IntelligentCross have reported positive experiences, highlighting the platform’s ability to minimize market impact and provide superior execution quality. For example, Bernstein’s analysis showed significant savings in post-match market movement, indicating a favorable user experience in terms of execution quality.
- Market Efficiency: The platform’s focus on optimizing price discovery and reducing market impact suggests that users benefit from a more efficient trading environment. This efficiency can lead to a better overall user experience, as traders can achieve their goals with less friction.
In summary, while the specific details of the user interface are not provided, the overall user experience of Imperative Execution’s IntelligentCross appears to be positive due to its ease of integration, adaptability to market conditions, and superior execution performance. However, for a detailed description of the UI elements, more specific resources or direct access to the platform would be necessary.
Imperative Execution - Key Features and Functionality
Imperative Execution and IntelligentCross
Imperative Execution, through its flagship product IntelligentCross, offers several key features and functionalities that leverage artificial intelligence (AI) to improve trading efficiency, particularly for institutional investors. Here are the main features and how they work:
AI-Assisted Scheduled Matching
IntelligentCross uses AI to optimize the matching process of buy and sell orders. This system calibrates the match schedule for each security based on the actual market response to its trades. This closed-loop measure-optimize-calibrate process allows the venue to adapt to market conditions, continuously improving to help traders achieve their performance objectives.
Minimization of Market Impact
One of the primary goals of IntelligentCross is to reduce market impact, which is the price dislocation during trade execution. By using AI-assisted scheduled matching, IntelligentCross minimizes market response after each trade, resulting in lower information leakage. This is crucial for institutional investors who aim to avoid moving the market.
Dynamic Matching at Scheduled Times
Orders are matched at scheduled times, typically milliseconds apart, and each match is executed at the market midpoint (NBBO mid). This dynamic matching process ensures that trades are executed efficiently and with minimal market disruption.
Simple Integration
IntelligentCross features a single order type (mid peg) that seamlessly fits into today’s electronic execution workflow. This simplicity means no programming or changes are required to the broker’s algorithmic suite or the buy side’s order entry process, making it easy to adopt and use.
Performance Metrics
IntelligentCross has demonstrated significant performance improvements compared to traditional exchanges. For instance, it performs about 8 times better than exchanges at the midpoint (0.15bps vs 1.2bps) and up to 4 times better at adverse selection at the touch (0.72bps vs 2.99bps).
Adverse Selection Protection Engine (ASPEN)
IntelligentCross includes the ASPEN (Adverse Selection Protection Engine) bid/offer trading book, which is designed to protect against adverse selection. This engine helps in reducing the costs associated with trading by optimizing the order matching process to minimize adverse selection.
Liquidity Improvement
The IntelligentCross ASPEN has shown significant improvements in liquidity. For example, it displayed liquidity that improved on the NBBO quote an average of 8.5 million times per day, with an average improvement of 29% of the spread in the NBBO.
Accessibility
IntelligentCross is accessible through major electronic execution providers, making it easy for institutional investors to integrate it into their existing trading workflows.
Conclusion
In summary, IntelligentCross by Imperative Execution leverages AI to create a smart trading venue that optimizes order matching, reduces market impact, and improves liquidity, all while maintaining simplicity and ease of integration into existing trading systems. These features collectively help investment managers reduce costs and maximize trading efficiency.
Imperative Execution - Performance and Accuracy
Evaluation of IntelligentCross Performance and Accuracy
Performance
IntelligentCross, developed by Imperative Execution, has demonstrated significant performance improvements in several areas:Price Improvement
The platform consistently offers better displayed prices than those available on traditional exchanges. For instance, it provides price improvements versus the National Best Bid and Offer (NBBO) more than 10% of the time for S&P 500 stocks, and its quotes are superior to the NBBO over 10 million times per day.Market Impact
The post-trade data shows lower market impact compared to the overall market, resulting in lower net costs of trading for participants. This is achieved through the platform’s unique matching logic that minimizes price movement after trades.Execution Quality
IntelligentCross matches orders at discrete times, using a closed-loop measurement-optimization-calibration AI cycle. This process ensures that the venue continuously improves and adapts to changing market conditions, maximizing price discovery and stability.Accuracy
The accuracy of IntelligentCross is supported by several independent analyses:Independent Validation
Exegy, an independent market data firm, has analyzed IntelligentCross’s price data and reported significant price improvements compared to exchange quotes. For example, the spread for Tesla, Inc. on IntelligentCross was 32% better on average than the best price available on the exchanges.Data Analysis
Pico’s Data Science Team conducted a report that examined the quality of trade execution, price discovery, and market impact for displayed orders on IntelligentCross. The report highlighted that IntelligentCross’s displayed quotations frequently beat the NBB/NBO, indicating better price discovery and valuable price improvement for participants.Limitations or Areas for Improvement
While the information provided does not detail specific limitations of IntelligentCross, there are a few general considerations:Adoption and Integration
The success of any new trading platform depends on its adoption by market participants. Ensuring seamless integration with existing trading systems and encouraging widespread use could be areas of focus.Continuous Improvement
Given the dynamic nature of financial markets, continuous monitoring and adaptation to changing market conditions are crucial. The AI-driven matching logic of IntelligentCross already incorporates a calibration process, but ongoing refinement and innovation will be necessary to maintain its competitive edge. In summary, IntelligentCross by Imperative Execution has shown strong performance and accuracy in optimizing trading execution, particularly in terms of price improvement and minimizing market impact. The platform’s AI-driven matching logic and continuous calibration process are key factors in its success. However, as with any financial technology, ongoing improvement and market adoption are essential for sustained effectiveness. Imperative Execution - Pricing and Plans
Pricing Plan
Imperative Execution offers a single pricing plan that applies to both its ASPEN and MIDPOINT matching models. The fee structure is based on a per-share fee of $0.0008 per share.
Features Included
- AI-Powered Order Matching: The platform uses advanced AI to match buy and sell orders, optimizing for minimal market impact and improved price discovery.
- Adaptive Matching Frequency: The frequency of order matching is dynamically adjusted based on real-time market conditions to reduce market impact and enhance trade value.
- IntelligentCross ATS: This alternative trading system leverages AI for superior execution quality and liquidity.
- Real-Time Learning Algorithms: The algorithms continuously learn from each transaction, allowing for real-time adjustments to improve matching strategies and minimize trading costs.
- ASPEN and MIDPOINT Matching Models: ASPEN operates as a near-continuous limit order book, while MIDPOINT executes trades at the midpoint of the best bid and offer, providing maximum price efficiency.
Payment Methods
Imperative Execution accepts various payment methods, including credit cards, PayPal, and bank wire transfers.
Free Options
While there are no free plans for trading services, the IntelligentCross ASPEN displayed market data feed (IQX) is available free of charge. This allows any firm to receive and utilize the displayed prices without additional cost.
Summary
In summary, Imperative Execution’s pricing is simple and focused on institutional investors, with a single fee structure and comprehensive features aimed at optimizing trading performance and minimizing market impact.
Imperative Execution - Integration and Compatibility
Integration and Compatibility of IntelligentCross
Connection and Access
IntelligentCross, the Alternative Trading System (ATS) operated by Imperative Execution, allows subscribers to access the platform via a Financial Information Exchange (FIX) connection. This connection is facilitated through an internet protocol address and must comply with the FIX API provided by IntelligentCross, currently supporting FIX 4.2.Network Requirements
To connect directly to IntelligentCross’ User Acceptance Testing (UAT) and Production servers, subscribers need to have NY4 cross-connects with the servers of Pico Quantitative Trading (Pico), or they can connect through other network service providers that have a presence in the Equinix NY4 data center in Secaucus, New Jersey.Data Feeds
IntelligentCross provides several data feeds, including a free market data feed known as IQX, which includes displayed orders from all three ASPEN books. Subscribers can choose to consume data from specific books through separate multicast addresses, ensuring flexibility in data integration.Platform Compatibility
The platform is specifically designed for registered US broker-dealers who must be in good standing with a Self-Regulatory Organization (SRO). This ensures that the system is compatible with the regulatory and technical requirements of these entities. However, there is no detailed information on its compatibility with a wide range of devices or other financial tools beyond the FIX protocol and the specified network connections.Order Routing
Orders are routed to different books within the ASPEN system based on specific criteria. For example, non-midpoint peg orders are routed to the ASPEN Fee/Fee book by default, while orders for the ASPEN Maker/Taker or Taker/Maker books must be identified using FIX tag ExDestination.Summary
In summary, IntelligentCross integrates with other financial tools primarily through the FIX protocol and requires specific network connections. While it is highly compatible with the systems of registered broker-dealers, detailed information on its compatibility with a broader range of devices or financial tools is not available. Imperative Execution - Customer Support and Resources
Customer Support Options for IntelligentCross
For individuals seeking information about the customer support options and additional resources provided by Imperative Execution, particularly for their AI-driven product, IntelligentCross, here are some key points:
Contact Information
Imperative Execution provides several contact avenues for customer support. You can reach out to them through their main contact number at 212-621-9640 for both sales and media inquiries. Additionally, they offer email contacts: info@intelligentcross.com for general inquiries and media@imperativex.com for media-related questions.
Resources
The website offers a variety of resources to help users get the most out of IntelligentCross:
- FAQ Section: This section addresses common questions and provides clarity on how the platform works, its features, and other general inquiries.
- Newsletters: Users can stay updated with the latest news, updates, and insights through the newsletters available on the website.
- Market Data: Imperative Execution provides access to market data, which is crucial for making informed trading decisions. This includes data feeds and analysis that highlight the performance of IntelligentCross compared to traditional exchanges.
- Documentation and Guides: While not explicitly detailed, the website likely includes documentation or guides on how to use the platform effectively, given the technical nature of the product.
Support for Trading
For traders, IntelligentCross offers specific resources to enhance trading performance:
- ASPEN and Midpoint Order Types: Detailed information is available on the different order types, such as ASPEN (Adverse Selection Protection Engine) and Midpoint orders, which are designed to optimize trading outcomes.
- Fee Structure: The website outlines the fee structure for different order types, helping users understand the costs associated with trading on the platform.
Business Continuity
Imperative Execution also ensures business continuity by providing a Business Continuity Plan Notice, which is accessible on their website. This plan outlines how they maintain operations during disruptions, ensuring minimal impact on trading activities.
While the website does not provide extensive details on dedicated customer support teams or live chat options, the available contact information and resources should help users find the necessary support and information to use IntelligentCross effectively.
Imperative Execution - Pros and Cons
Advantages
Optimal Performance
Imperative Execution’s platform is built with close-to-the-hardware, massively parallel transaction processing, which optimizes raw performance and fully utilizes modern multi-core, huge-memory servers. This results in superior execution quality and faster transaction times.
Price Discovery and Market Efficiency
The IntelligentCross ATS is known for optimizing price discovery and minimizing market impact, leading to consistently superior prices compared to those available on major U.S. exchanges. This enhances market efficiency and saves significant costs for traders.
AI-Driven Matching Logic
The use of artificial intelligence in order matching logic helps in achieving high execution performance. This AI-driven approach ensures that trades are executed at the best possible prices, frequently better than the National Best Bid and Offer (NBBO).
Disadvantages
While the specific website provided does not delve into the disadvantages of Imperative Execution’s technology, we can infer some potential drawbacks based on general challenges associated with similar systems:
Technical Complexity
Building and maintaining such sophisticated trading platforms can be technically complex, requiring significant expertise in both finance and technology. This complexity can lead to higher development and maintenance costs.
Security Concerns
High-performance trading systems, especially those involving AI and complex algorithms, can be susceptible to security vulnerabilities. Ensuring the security and integrity of such systems is crucial to prevent potential breaches or data compromises.
Scalability and Concurrency
Managing high-volume transactions and concurrent operations can be challenging. Ensuring that the system scales efficiently without introducing race conditions or deadlocks is essential for maintaining performance and reliability.
In summary, Imperative Execution’s AI-driven finance tools offer significant advantages in terms of performance, price discovery, and market efficiency. However, they may also present challenges related to technical complexity, security, and scalability.
Imperative Execution - Comparison with Competitors
Comparing Imperative Execution’s IntelligentCross ATS with Other AI-Driven Finance Tools
Unique Features of Imperative Execution
- AI-Optimized Price Discovery: IntelligentCross ATS uses AI algorithms to optimize price discovery and minimize market impact. This results in better execution quality and tighter spreads compared to traditional exchanges.
- High-Frequency Trading Technology: Imperative Execution provides high-frequency trading technology and infrastructure solutions, focusing on low latency and efficient trade execution. This is particularly beneficial for institutional investors such as hedge funds and investment banks.
- Continuous Order Matching: IntelligentCross matches orders near-continuously, within microseconds or milliseconds, to achieve maximum price stability after trades. This ensures better displayed prices and tighter spreads, making the market more efficient.
- Regulatory Compliance: As an SEC-registered US equities Alternative Trading System (ATS), IntelligentCross adheres to strict regulatory requirements, ensuring transparency and trust among its subscribers.
Potential Alternatives
While Imperative Execution is specialized in equity trading and execution, other AI-driven finance tools serve different aspects of financial operations:
- Planful: This is a cloud-based Financial Planning and Analysis (FP&A) tool that uses AI to streamline financial operations. Planful Predict, its flagship program, provides intelligent forecasting recommendations, detects errors, and identifies patterns. It is more focused on financial planning and budgeting rather than trade execution.
- Workday: Workday integrates AI with its cloud infrastructure for real-time data insights and predictive analytics. It is particularly suited for large enterprises with complex financial operations, offering a holistic approach to financial management. However, it lacks the specific focus on trade execution that Imperative Execution provides.
- Anaplan: Anaplan is strong in complex scenario planning and data visualization, making it a good choice for large organizations with extensive forecasting needs. While it supports advanced modeling, it does not specialize in the high-frequency trading and order matching that IntelligentCross offers.
Market Position and Growth
IntelligentCross has been growing rapidly, aiming to break into the top five for volumes on alternative trading systems. It has already shown significant improvements in execution performance, offering better displayed prices and tighter spreads than traditional exchanges. This growth is supported by its innovative use of AI in order matching and price discovery.
In summary, Imperative Execution’s IntelligentCross ATS stands out for its AI-driven approach to optimizing trade execution, particularly for institutional investors. While other tools like Planful, Workday, and Anaplan offer strong AI capabilities in financial planning and analysis, they do not match the specialized focus on high-frequency trading and order matching that Imperative Execution provides.
Imperative Execution - Frequently Asked Questions
Frequently Asked Questions about Imperative Execution and IntelligentCross
What is Imperative Execution?
Imperative Execution is a financial technology company that specializes in building efficient trading venues. It is the parent company of IntelligentCross, an alternative trading system (ATS) that uses artificial intelligence (AI) to optimize trading performance.
What is IntelligentCross?
IntelligentCross is an alternative trading system (ATS) developed by Imperative Execution. It is the first venue to use AI to optimize order matching, aiming to improve price discovery and minimize market impact. This system is primarily used by institutional investors such as hedge funds and investment banks.
How does IntelligentCross use AI?
IntelligentCross utilizes AI algorithms to optimize price discovery and reduce market impact. This technology helps in matching orders in a way that enhances market efficiency and provides better execution quality compared to traditional exchanges.
What are the benefits of using IntelligentCross?
Using IntelligentCross can result in significant cost savings and improved execution quality. For example, Bernstein reported saving approximately $400,000 in post-match market movement at 20 milliseconds after the match by trading through IntelligentCross Midpoint. Additionally, it provides consistently superior prices compared to the best quotes available on U.S. exchanges.
Who is the target audience for IntelligentCross?
IntelligentCross is primarily designed for institutional investors, including hedge funds, investment banks, and other large financial institutions. It is not intended for individual traders.
What kind of technology and infrastructure does Imperative Execution provide?
Imperative Execution offers high-frequency trading technology and infrastructure solutions, focusing on low latency and efficient trade execution. Their platforms are built with close-to-the-hardware, massively parallel transaction processing to optimize raw performance and fully utilize modern multi-core, huge-memory servers.
How is the pricing structured for IntelligentCross?
The pricing for IntelligentCross includes a base rate of $0.0008 per share for each side of a transaction. However, subscribers can benefit from lower fees through incentives such as the Total Composite Volume Incentive and the Active Order Incentive, which are based on market volume and order activity.
Who founded Imperative Execution?
Imperative Execution was founded by financial industry veterans and trading technology experts. Roman Ginis is one of the key figures associated with the company.
What funding has Imperative Execution received?
Imperative Execution has raised $9.0 million in funding, with the last funding round occurring on December 4, 2018. Investors include Point72 Ventures, Clocktower Technology Ventures, Innovating Capital, and Mango Capital.
Where is Imperative Execution based?
Imperative Execution is based in Stamford, Connecticut, United States.
What is the focus of Imperative Execution’s research and development?
Imperative Execution is actively involved in research and development related to financial technology and algorithmic trading. They focus on exploring new ways to improve market efficiency and execution quality.
Imperative Execution - Conclusion and Recommendation
Final Assessment of Imperative Execution
Imperative Execution is a financial technology company that stands out in the AI-driven finance tools category, particularly through its core offering, the IntelligentCross Alternative Trading System (ATS). Here’s a detailed look at who would benefit most from using it and an overall recommendation.
Key Features and Benefits
- Institutional Focus: Imperative Execution primarily serves institutional investors, including hedge funds, investment banks, and other large financial institutions. This focus allows the platform to cater specifically to the needs of these sophisticated market participants.
- AI-Optimized Trading: IntelligentCross uses AI algorithms to optimize price discovery and minimize market impact. This results in better execution quality compared to traditional exchanges. The system matches orders near-continuously, within microseconds or milliseconds, depending on the market conditions.
- Intraday Optimization: The recent introduction of Intraday Optimization has significantly enhanced the platform’s performance. This technology adapts to market conditions in real-time, optimizing trades over 66 million times per day. It ensures more liquidity and reduced market impact, benefiting subscribers with an average of 45,000 more trades per day with zero markouts.
- High-Frequency Trading Technology: Imperative Execution provides high-frequency trading technology and infrastructure solutions, emphasizing low latency and efficient trade execution. This is crucial for institutional investors who require swift and reliable trading capabilities.
Who Would Benefit Most
Institutional investors are the primary beneficiaries of Imperative Execution’s services. These include:
- Hedge Funds: Looking to optimize their trading strategies and minimize market impact.
- Investment Banks: Needing high-frequency trading solutions and efficient execution infrastructure.
- Other Institutional Investors: Such as pension funds, mutual funds, and other large financial entities that require advanced trading technologies.
Overall Recommendation
For institutional investors seeking to enhance their trading efficiency, reduce market impact, and gain better execution quality, Imperative Execution’s IntelligentCross ATS is highly recommended. The platform’s use of AI algorithms, real-time optimization, and high-frequency trading technology makes it a valuable tool for those who need sophisticated trading solutions.
Additional Considerations
- Regulatory Compliance: IntelligentCross is an SEC-registered US equities ATS, and only registered US broker-dealers in good standing with a Self-Regulatory Organization (SRO) can be members. This ensures a compliant and secure trading environment.
- Continuous Improvement: Imperative Execution is actively involved in research and development, continuously seeking ways to improve market efficiency and execution quality. This commitment to innovation ensures that the platform remains at the forefront of financial technology.
In summary, Imperative Execution’s IntelligentCross ATS is a powerful tool for institutional investors, offering advanced AI-driven trading solutions that optimize execution quality and minimize market impact. Its features and benefits make it an excellent choice for those needing sophisticated and efficient trading technologies.