Traders Magazine Online News, June 17, 2015 John D'Antona Jr. Trade Cost Analysis (TCA) is among the top tools the buyside is using to improve its alpha generation - and trade effectiveness. So much so, that a new report from market consultancy Greenwich Associates noted that a over 90% percent of equity trading desks actively use transaction cost analysis (TCA) to measure trade effectiveness, identify outliers and to meet reporting and oversight requirements, but leveraging TCA as a real-time source of alpha remains the holy grail. That's right, 9 out of 10. The new report, "Equity TCA: Drive Toward Alpha Generation Continues," highlights the increasing focus of the buyside to leverage TCA for alpha generation. Why? "A combination of market structure changes and technology innovations are changing investors' perceptions, and realities, for how TCA can be used," said John Colon, managing director of Greenwich Associates Market Structure and Technology practice. The report findings are based on a recently completed study with 199 buyside traders around the world. The report found out that nearly 50% of equity desks globally now use TCA as both a pre- and post-trade tool with one-quarter using TCA for real-time, in-trade analytics. Due to their access to the resources for deploying and integrating new technology, the highest-volume firms are the biggest users. TCA as Alpha Generator Greenwich wrote that the recent regulatory push to increase transparency and the explicit separation of execution from payment for research will reduce the role of research as a tie-breaker where brokers' execution capabilities are essentially equivalent. Market conditions, including the low interest-rate environment and global regulatory reform, will drive continued investment in TCA and enhance the role of TCA performance as a differentiator. Third-Party Technology Providers Nearly three-quarters of investors look to third-party providers for TCA solutions. The most frequently used providers have changed little over the past several years and include ITG, which is used by 38% of study participants, Bloomberg BTCA, Abel Noser, and Instinet. For more information on related topics, visit the following channels:
Does anyone have any good technical books on TCA? I have only seen it as chapters in Investment Performance Management. Feibel, if I recall.