Bloomberg Tradebook has come out with REACT, a new opportunistic trading strategy for US equity trading. This algorithm seeks to capture maximum price improvements by trying to predict and react to short-term price direction and by dynamically adjusting the quantity, price and market venues in which to represent an order. REACT makes decisions based on a number of factors including: real-time market trades; intraday stock trading performance; bid/offer spread and volatility; and deviation from historical trading patterns.
REACT offers market participants a way to maximize opportunities in increasingly fragmented liquidity markets. In comparison to trading strategies that represent orders in only one market venue and at a static price that may stand in the way of the market's natural trends, REACT is designed to simultaneously represent orders in the most active venues and participate in that trend as it seeks price improvement. Traders can monitor the prices and market venues that REACT places orders in and gauge how successful it predicts and responds to market conditions in real-time.
According to Bloomberg Tradebook, the new algorithm tries to predict and respond to market movements like a trader. It attempts to intelligently predict and dynamically react to small market movements that may translate into larger opportunities for price improvement and position orders to capture those opportunities. REACT is accessible via the Bloomberg Tradebook system. The strategy leverages the data resources and analytic functionality of the Bloomberg Professional service. Bloomberg Tradebook is a global agency broker used by institutional traders, broker dealers, hedge fund managers, marketmakers and portfolio managers. The Bloomberg Tradebook service provides a comprehensive front-to-back execution, clearing and settlement solution for equities, futures options and FX.