Transaction cost analysis (TCA) has come a long way since the early days when it was considered a basic monitoring tool for compliance in the equities markets. Today, market fragmentation, technological advancements and regulatory change have altered the shape of the industry. TCA is not only used to provide in-depth analysis into venues, algorithms and trading strategies but also across a wider range of asset classes such as foreign exchange and fixed income instruments.
According to a survey of 69 buyside traders conducted by US-based consultancy Greenwich Associates in 2012, TCA tools were used by 33% of firms in the currency markets, up from 28% in 2011. The equities market saw the number rise to 91% from 80% during that period while it rose to 19% from 16% in the futures market.
In TCA Across Asset Classes 2013, we start with a fresh look at what TCA is for, and with the help of industry experts ask what multi-asset TCA can learn from the equity experience, how it is following the route of trading electronification across asset classes, why the quality of results depends on the right questions being asked, what technology challenges the growth in TCA has posed, what TCA frameworks are likely to be most effective, and how TCA is now being used in the FX market.