According to a news release, TOPx will enable BNY Global Transition Management to generate customized execution strategies aligned with the investment objectives of a client’s portfolio to better protect the value of assets during changes in investment strategy.
TOPx is designed to minimize implementation shortfall by focusing on the trade-off between market impact and timing risk by simultaneously identifying the optimal trading schedule for each stock in the portfolio, the news announcement said.
As the trading day unfolds and trading conditions change, TOPx continually reoptimizes the trading schedule of each stock to minimize the overall transition cost. By dynamically monitoring market depth and comparing real time pricing with predicted contributions to tracking error, TOPx produces the most efficient trade schedule for each security, the company said.
TOPx will be used in tandem with the advanced transition analytic tools and comprehensive hedging strategies that BNY GTM already employs to form a risk management platform.