You know the fundamentals of your markets better than anyone. But in today’s environment, optimal investment decisions are impossible without real insight into how computer-generated trades distort your marketplace.
Turn Algorithmic Disruption to Your Advantage
Bridgeton Research gives you that insight.
Actionable Data for Your Industry
Solutions for Commodity Traders
Algorithmic trades now account for an estimated 70% of volume in the major agricultural and energy markets—and these traders don’t adhere to the strict logic of supply and demand that commodity producer and consumer companies typically focus on. Bridgeton’s proprietary models predict the order levels and volumes of these algo trades so you can plan your hedging activities more accurately.
Solutions for Hedge Funds and Proprietary Trading Groups
When multiple styles of algorithmic trade flows align with discretionary trade flows across asset classes, it can create feedback loops that exaggerate the velocity and magnitude of price path deviations. Bridgeton’s online portal and real-time data monitor help you untangle these loops, distinguish the various forces in play, and make better asset allocation decisions.
Solutions for Institutional Asset Managers
As the manager of a family office, sovereign wealth fund, or institutional investment fund, you can apply Bridgeton’s algorithmic strategy expertise directly to your advantage. We use the same models that analyze and simulate algo activity to design unique trading instruments for your team, with proven edge backtested against a range of market environments.
Analytics With Impact
At Bridgeton, our mission is to bridge the gap between fundamental research and the often opaque activities of algorithmic traders. We do this by combining an in-depth analysis of the CFTC’s weekly Commitment of Traders (COT) report with our advanced models that replicate the key strategies employed by quants, algos, and computer-generated trading systems.
We then boil this down to specific order levels, volumes, and net positions of each algorithmic trading strategy, so you can see precisely where buying and selling from this important market segment—estimated at over $750bn of AUM according to our independent research—is likely to impact your markets.
When the market moves in a way contrary to your fundamental analysis, it doesn’t mean your analysis is wrong—it means the algos are following a different agenda and timetable.
The Bridgeton research reports identify precise order levels at which the most widely-followed algorithmic strategies—trend-following, mean-reversion, and value pattern—are likely to trigger buying or selling activity in your markets.
Our clients have instant access not just to our daily reports, but to the underlying data. Data you can integrate directly into your own analysis and thesis generation systems.
Advanced Technology at Your Fingertips
Bridgeton’s TradeFlow Radar platform lets you easily view a summary of the algorithmic order flows and net positions affecting your markets every morning, and drill down to as much detail as you need.
Create a portfolio of your markets of interest and view the estimated net positions of algorithmic traders in the strategy classes that are relevant to you.
The price level at which each algorithmic sub-strategy is expected to generate orders is clearly identified, with estimated impact on daily volume.
The daily price chart provides at-a-glance context for each market you follow, with order levels superimposed to scale so you can evaluate clusters of orders against market action.
The history of algo traders’ net positions over time, aligned with market prices, provides further insight into the influence of algorithmic trades in your market.
TradeFlow Radar also includes:
When breaking news and macro events flood the headlines and overwhelm markets, Bridgeton’s Event Bulletins give you an alternative perspective. Knowing to what extent algo trades are responsible for market turmoil helps you see through the confusion and chart your own course.
Bridgeton’s Real-Time Monitor* displays predicted algo order book ladders in a concise format, alerting you as order levels are approached or hit throughout the trading day and allowing you to take advantage of market volatility as it unfolds.
*requires Bloomberg and Excel
Bridgeton’s proprietary Market Heatmap gives you a concise bird’s-eye view of all the interrelated markets in your industry. This clearly identifies the markets that are most active and/or closest to hitting algorithmic order levels today.
The Universe of Algo Strategies, Revealed
Bridgeton covers the full range of algorithmic and computer-generated trading strategies so you can easily see how these trades are affecting your business, no matter which strategy is driving the trades.
The vast majority of computer-generated trades can be broadly classified as trend-following in nature. They may have different theses, use different mathematical formulas, and apply different risk-management techniques, but they all seek to capitalize on a sustained move in the underlying market. Bridgeton’s proprietary models—revalidated weekly against the CFTC’s Commitment of Traders Report—predict these trend-following positions, orders and order volumes.
A smaller but still significant group of algorithmic strategies may be classified as mean-reverting. These are strategies, often statistical in nature, that seek to capitalize on the tendency of some markets to revert to the mean rather than to trend strongly in one direction or another over time. The interplay between mean-reverting (MR) and trend-following (TF) strategies often leads to brief periods of indecision or volatility.
Bridgeton breaks MR and TF activity down into sub-strategies so you can clearly identify these inflection points and plan accordingly.
Intellectually midway between the trend-following and mean-reverting approaches are value pattern (VP) trading strategies. VP traders recognize underlying trends but also recognize that the forces of mean reversion tend to interrupt the momentum of a trend periodically. VP positions tend to be entered only on a setback or temporary reversal in an ongoing market move, and held for shorter durations than either TF or MR trades.
Like MR trades, VP trades work against the majority TF order flow to some extent, increasing volatility at inflection points. Bridgeton’s analysis helps you identify and understand these points.