Process

Anderson will be responsible for successive commitments to intermediaries or trading venues as he attempts to execute the order he received from Fiona Browne. He has to choose whether to manage the order directly or to give it to an intermediary(ies), ceding the management activities. In our example, we assume that Anderson will use a mix but will retain most of the control.

Moreover, although he will use Clive Beckford at Smedley, Anderson will not divulge the entire amount of the order to Beckford (see Figure 5.2.4). Remember, in Book 2, Part 1, we described this as hidden liquidity.

Figure 5.2.4 The buy-side trader must decide what role(s) to play in managing the order, which execution venues to employ, and how much of the order to commit or reveal during the execution process.