Four Features to Look for in Broker Firm Offering Algorithmic Trading Solutions in India

by Jayden Smith Blogger

With significant increase in algorithmic trading volumes, a number of firms offering traditional brokerage services in India are now offering quant-based trading solutions. While algo trading does make the process of trading more efficient, the risks involved are also high. Here are some features to look for in an algorithmic trading solution offered by an Indian brokerage firm.

Real Time Market Data

Algo-trading provides users with speed, accuracy and liquidity to trade efficiently. It allows traders to carry out trades without the involvement of human error and emotions. For algo trading to be successful, the firm offering brokerage services in India should make available market data and company data in real time. It should have the necessary infrastructure such as co-location and inter-exchange connectivity on leading stock exchanges like the BSE, NSE, MCX and MCX-SX. This enables investors to analyze and act on real-time market data as well as work across multiple markets.

Minimal Time Lag

Low latency is one of the most important features to look for in an algo-trading solution. Latency is the time delay that occurs as data moves from one point to another. In today’s dynamic trading world, prices can swing multiple times within the matter of mere seconds and time delay can make or break your trading venture. Latency should be kept at the lowest possible level (microseconds) so that users get accurate, up-to-date data without time lag. It also helps if the firm offers a full direct market access solution so that investors can carry out trades independent of an intermediary broker.

Extensive Back Testing and Risk Management

Reliable firms offering algo-trading solutions as part of their brokerage services in India test trading strategies on historic data. This back-testing feature of historic data is essential to evaluate the strategy’s practicality and profitability. It also enables the firm to undertake any necessary changes before implementing the strategy. Apart from this, investors should check whether the firm has risk management capabilities such as real-time pre-trade risk checks and post-trade views of various metrics for comprehensive performance analysis.

Full Service, Registered Company

Most importantly, the firm offering algo-trading brokerage services in India should be registered with leading stock exchanges in India such as the BSE, NSE, MCX and MCX-SX. Global investors looking to enter the Indian markets should consider a company offering end-to-end solutions. Along with trade execution, the company should provide pre-entry market analysis, assistance for setting up FPI entities, assistance for compliance with regulatory requirements in India, assistance in procuring high performance hardware infrastructure and co-ordination with banks for seamless trading.

Look for these features and experience a seamless, hassle-free trading experience in India!