BestX Case Study: Interpreting Signaling Risk

Our latest article continues our series of case studies for the practical deployment of the BestX execution analytics software. Please note these case studies should be read in conjunction with the BestX User Guide, and/or the online support/FAQs. The focus of this case study is the interpretation of the different signalling risk metrics available with the BestX product. 

The BestX Signaling Risk and Signaling Score metrics are complementary, and when used in conjunction, can be used to understand potential execution behaviour. In this case study we illustrate how the metrics can help identify 3 different categories of execution: 

  1. ‘Market Momentum’ trades, i.e. those potentially chasing momentum, or trading too quickly

  2. ‘Averaging In’, i.e. where an algo is effectively supplying liquidity to the market

  3. ‘Mean Reversion’, i.e. the ‘hot potato’ trade

If you are a contracted BestX client and would like to receive the full case study please contact BestX at contact@bestx.co.uk.

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Liquidity & Execution Style Trends

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Regime Change: An Update