Trade Impact Analysis – How Institutions Use The Odds Maker

Trade Impact Analysis – How Institutions Use The Odds Maker

Dec 4, 2006

We received great insight as to how The Odds Maker is used by some of our institutional customers recently. It is always interesting for us to see the new ways that people use Trade-Ideas software. Understanding how this segment implements The Odds Maker can improve how others use the tool as well.

Institutions like CIBC, Knight, and Jefferies use Trade-Ideas to alert themselves to the best time to enter buy and sell orders in order to beat the VWAP (Volume Weighted Average Price). The VWAP alerts within Trade-Ideas have long been used by these firms. The Odds Maker, however, allows the institutions to perform trade impact analysis – or gauge the trade impact of placing orders at the time indicated by Trade-Ideas software.


Consider the summary The Odds Maker provides. Several institutions refer to the values for the Average Winner and Average Loser as Average Price Improvement and Average Price Impact respectfully. The average winner gives an institutional trader an idea of possible price improvements if they executed orders to buy and sell at the time of the trading above or below the VWAP alerts.

This just goes to show how two different users can apply the same information that benefits each user differently. When we first conceived of the Odds Maker and thought about how our customers where going to use it we always imagined that it was a tool for building a trading system that would compete with the likes of TradeStation, etc.

Trade-Ideas benefits from producing such a unique and niche tool that can satisfy the needs of the retail and the institutional trader as an idea generation, pattern recognition, and risk management tool. Our different customers use the tool in ways never imagined – this in turn helps us develop and strengthen the tool in new and interesting ways.

Thank you to our Institutional Customers!