Slippage is an inevitable part of the trading process, with even the most experienced fund managers suffering some form of negative slippage every now and then. Nevertheless, there is an automatic way to easily and decisively reduce trading slippage, helping you to stay on top of your costs.
What is Trading Slippage & Why Is It a Bad Thing?
When we make a trade, there may be a discrepancy between the intended bid/ask price, and the trade execution price. At times, this discrepancy can work in your favour, like when you pay less for a security than you intended to; at others, however, the discrepancy could be in the negative, with a security costing you more than you may have been comfortable spending.
The slippage on each security tends to be calculated in the cents or even mills, but when you consider the amount of securities you trade in any given week, that amount could add up to thousands or even hundreds of thousands of euro.
Sadly, some hedge fund managers underestimate just how much of an issue trading slippage can be, and those that don’t often don’t have the necessary tools to calculate their slippage costs through transaction cost analyses.
But there is an easy way to stay on top of your trading slippage.
Discover the Wakett Framework for Trading Slippage
Our software has been developed with hedge funds in mind. That’s why it’s so good at running a wide variety of financial processes, such as real-time calculations and backtesting, reconciliations, and trading slippage analyses.
For the latter, our software uses three separate components to ensure on-going, accurate monitoring of your trading slippage costs.
- ONESTAT is our data analysis software that helps you measure and report your slippage costs.
- NEXTVIEW is our predictive software that is designed around your trading style and uses the information generated by ONESTAT to adjust the execution of your portfolio depending on market conditions.
- CYBMIND is our strategy automation software that can easily have custom execution rules integrated into it so it can implement your financial strategy successfully.
Why Lose Money When You Can Gain Insight?
This process is recursive and ongoing, ensuring you continually gain better insight into how much slippage is costing your company and simultaneously reduce it. So, what are you waiting for? Get in touch with us to discuss how the Wakett Framework could help you reach your goals faster!