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Article: TCA's importance to grow.(trade cost analysis)
- Article from:
- Traders
- Article date:
- January 1, 2007
- Author:
CopyrightCOPYRIGHT 2007 SourceMedia, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Get a group of buyside traders together, and the topic of trade-cost analysis can easily turn into a heated discussion. One issue certain to come up is whether it is possible to accurately measure trading costs in a dynamic marketplace. Throw in the concept of linking traders' compensation to trade-cost analysis rankings, and the conversation can get downright ugly.
The results last month of a Traders Magazine survey show that trade-cost analysis plays a role in trader compensation at 39 percent of the firms that responded. The discipline of TCA, which seeks to measure implicit trading costs such as market impact and opportunity costs, also will play a larger ...