Bloomberg has introduced a range of new elements to its Rule Builder (RBLD) solution to continue development of its automated trading offerings. The new functionality available to asset managers is designed to help improve efficiency of rules-based trading and comes alongside increased use of automation through RBLD.
“In the last few years, we’ve seen clients trading more of their flow electronically rather than via voice, which means that we see more prices on screen, and that in turn provides more opportunities to automate trades,” says Ravi Sawhney, global head of trade automation & analytics at Bloomberg. “We’re all familiar with the term liquidity begets liquidity, but taking that a step further, automation enables quicker access to that liquidity, creating a virtuous circle. The productivity benefits that are realised through automated trading are well understood by the industry, but we’re looking beyond that. The way clients use automation is shifting, and adding new tools to Rule Builder enables us serve as the technology partner that evolves alongside them.”
RBLD is a multi-asset automated trading solution which can offer buy-side execution traders a way to deploy automation, including potentially increased speed and accuracy in trading and allowing more time to dedicate to clients and complex workflows.
RBLD should allow users to create rules within the Bloomberg Terminal that automate actions on selected orders. These auto-routing rules can be easily shared, modified, enabled or disabled across a trading desk.
Fixed income rates activity automated through RBLD has reportedly more than doubled since 2021, with year-to-date volumes until April 2023 reaching all-time highs for active users and trading activity according to Bloomberg. In addition, its own analysis of trading data showed a nearly five-fold increase in round-lot activity (>US$5 Million), with more clients increasing the size of their orders automated using RBLD.
“There’s no question that automated trading will keep growing,” says Sawhney. “In the last year year or so, automation has shifted from a nice to have tool, to one that’s become critical to how many desks trade. What we’ve seen is an increasing number of firms setting internal targets for order flow that they want automated, with a goal of enhancing the efficiency of their trading desks overall. These automation targets vary from firm to firm, and by asset class, depending on how electronic that market is, but it is something we’re seeing more of than even just one year ago. Our focus is on supplementing the automated trading process to help clients not only achieve those targets, but do so in a way that enables them to find ways to generate alpha.”
Bloomberg says that it is focused on delivering new tools and functionality within RBLD as clients’ use of automation evolves.
Recent new functionality includes:
- Timed Release: Clients can write rules for fixed income and equities trades, to delay an order by either a fixed amount of time or to a certain point in the future such as a particular market close. This enables them to automatically route orders to market to hit a certain benchmark time or to access markets that they would not usually access due to a difference in trading hours.
- Order Rerun: Clients now have the ability to set up rules for fixed income trades that immediately re-submit a trade in the event a rules-based trade does not execute, such as limited dealer response or the limit price is not met. This potentially helps increase the likelihood of execution for the same order.
- Integrated Economic Data: RBLD now has data from economic releases integrated into its rule-based workflow, enabling clients to manage risk and volatility trading across asset classes during significant market movements. Orders can be queued to appear in a fixed income EMS (TSOX) during the rules-specified time period, such as five minutes prior to or 10 minutes following an announcement.
“Effective automated trading solutions improve productivity and support the customised ways in which market participants look to access liquidity,” says Colby Jenkins, strategic advisor, capital markets at consultancy Aite-Novarica. “This enables firms to focus on high-value activities to support their clients in a constantly changing market environment. Consistently enhancing these tools is key to meeting firms’ increasingly sophisticated and continually evolving portfolio and trading strategies.”
Sawhney adds, “As automation is now critical to our buy-side clients’ trading workflows, they need solutions that deliver innovative capabilities that help in both boosting productivity and demonstrating execution performance improvements. Rule Builder clients are able to create and manage automation rules, in real-time, directly on the Bloomberg Terminal. Not only does this minimise their technology lift, it allows them to express their trading intent using the rich data-sets and analytics available across the Bloomberg network.”
©Markets Media Europe 2023
