Broadridge Financial Solutions has introduced an AI-driven algorithm insights service for its NYFIX network, aimed at enhancing trading accuracy and reducing costs for buy-side firms. The new service leverages real-time liquidity mapping to help asset managers, hedge funds, and other institutional traders optimise their algorithmic trading strategies and improve performance.
The solution, the first of its kind according to the company, uses advanced AI to analyse both public and private data to identify liquidity patterns and predict the best execution routes for trades. By pinpointing potential dark pool fill locations and minimising cost outliers, the service provides traders with actionable insights to refine their strategies in real time.
“This isn’t an algo wheel or switching engine,” points out George Rosenberger, Head of NYFIX at Broadridge, in conversation with TradingTech Insight. “What we’re doing is analyzing the broker algorithms available to a client and using decades of research — particularly from Babelfish, which our co-founders helped build — to identify the best algo for the specific security they’re trading. Some symbols behave similarly, others don’t, and we’ve segmented all U.S. securities into different proprietary categories. For each category, we’ve rated which algorithms are most effective. The key differentiator is that we’re looking at the security level. If a client wants to optimise dark fills, for example, we know precisely which algo from which broker will perform best for that particular security. And we don’t stop there. Just like Waze helps drivers avoid traffic by analysing real-time data from thousands of inputs, we’re giving traders a route to optimal execution. If market conditions shift mid-trade, we issue liquidity alerts to recommend a more suitable algo, keeping them on track.
“It’s all about guiding clients to the right decision pre-trade and making adjustments along the way,” he says. “But importantly, we’re not taking control of the order — we’re providing an expert network that helps the buy side choose the best algo for the job.”
The platform builds on research from Jeff Alexander and Linda Giordano, co-founders of Babelfish Analytics, whose work on liquidity analysis and algorithm optimisation has been integrated into the new offering.
“We’ve worked with the buy side for decades, and one thing we’ve learned is that traders’ instincts are invaluable — we don’t want to take them out of the process,” says Babelfish CEO Giordano, who is consulting with Broadridge. “But even the best traders can sometimes choose an algorithm that isn’t well-suited to the moment. In fact, we’ve found that about 20% of the time — and often with larger trades — the chosen algo results in significant outliers that drive up overall execution costs. These outliers have a disproportionate impact, which is exactly what we’re aiming to reduce.
“The issue is that algo selection is often based on gut instinct, even though the algorithms themselves are highly scientific and quantitative. What we’re doing is turning that selection process into something data-driven and scientific. By analysing broker algos across the board, we can identify which algo is best suited to a given trade, based on the stock, liquidity conditions, and the trader’s specific goals.”
This approach is fundamentally different from an algo wheel, which is more of a ‘set-it-and-forget-it’ mechanism, says Giordano. “Algo wheels typically run on pre-programmed parameters, but they don’t adjust to market changes. What we’ve built has a course-correction capability — it monitors the market landscape in real-time and alerts the trader when conditions change and a different algo would perform better. The goal is to help traders avoid costly outliers by making adjustments before market impact occurs. But it’s also critical that this integrates into existing workflows. If it doesn’t, the value is lost. What we’re delivering is a tool that seamlessly fits into the trader’s process, providing alerts and insights to reduce execution costs and improve outcomes — all without the trader needing to constantly monitor the market themselves.”
Initially available to NYFIX Order Routing clients in the U.S. equities market, Broadridge plans to expand the service to other asset classes and regions, as well as to clients using other order routing networks.
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