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Chinese Investment Bank Builds Algo Strategies for Retail Customers, Taps Progress Apama Platform

Citing demand from high-net worth retail customers, China Merchant Securities is providing eight common strategies for equities and equity derivatives, and plans to expand the offering to institutional clients in the future.

Demand for algorithmic trading is heating up in China where one leading investment bank, China Merchants Securities has licensed software from Progress Software, according to today’s announcement. But the message is clear — in China’s rapidly developing securities markets, the interest in algo trading is growing and appears to be emerging on the retail side. This is in contrast with trends in U.S., where algorithmic-trading first popped up on proprietary trading desks at the major investment banks, before strategies were offered to institutional clients.

According to Progress Apama, China Merchants Securities is responding to interest from its high net worth retail customers in algorithmic trading by supplying them with both ready-made and client specific algorithmic strategies.

China Merchants went into production with Apama’s algo trading platform last June in Shenzhen. Retail investors currently have access to eight common strategies for equities and equity derivatives including volume-weighted average price (VWAP). Plans are to expand the platform to other asset classes including financial index futures and commodities futures.

“Algorithmic trading in China as been growing but few brokerage firms can offer clients a customizable, scalable and robust algorithmic trading platform with ultra-low latency,” commented GuangYan Wu, general manager of Individual Investor Dept. from China Merchants Securities. Wu said his firm’s strategy is to offer value added services to customers and grow its retail business. It chose to build its algorithmic platform on top of the Apama Progress platform.

According to Richard Bentley, VP of capital markets at Progress, China Merchants chose Apama over more than 10 competitors because the tech provider demonstrated to its IT team that it had the most customizable and scalable algorithmic platform. Apama’s team worked closely with the firm to build “highly targeted trading strategies specific to the Chinese market,” stated Bentley.

Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio

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