The percentage of short trading ideas that institutional brokerage firms globally provided clients climbed to record levels in August 2008, indicating a strong belief markets would continue to be volatile near term.
Trade Ideas Limited (TIL) reported today that 45% of all ideas sent to hedge funds and asset managers via its system in August were short sales versus 43% in July 2008, the previous high. The figure was 34% in August 2007, when the percentage of short ideas first began to climb noticeably. As opposed to analyst recommendations, which focus on 12-month price targets, trade ideas developed by equity sales people suggest opportunities that are likely to generate the greatest amount of “alpha” or market-beating profit in the short or near-term.
The adoption of the alpha capture systems used by the sell-side to communicate trade ideas, and by the buy-side to track their performance, also grew significantly. youDevise reported today that a monthly record of 24 new clients signed to use its Trade Idea Monitor in August 2008, bringing the total to 392, up 65% from a year ago. The previous record was 23 new clients in June 2008. The number of registered users reached a record 6,455 for August 2008, up 82% from a year ago. The TIM is the leading third-party alpha capture system for creating, sending and receiving ideas sent through Trade Ideas Limited’s central hub.
youDevise’s buy-side users allocate between 25% and 100% of their trading or research commissions, or pay cash, based on the success of the ideas they receive. This incentive has generated a new revenue line for many brokers and is attracting a growing number of high-quality ideas, so that as of August 31, 2008, there were a record 289,917 current and historical ideas in the database, up 17% from July 2008 and more than triple a year ago.
About Trade Ideas Limited: Trade Ideas Limited (www.tradeideas.org) was founded in 2005 by Citigroup, Credit Suisse, Dresdner Kleinwort and Merrill Lynch to encourage the use of trade ideas as a commission-generating, value-added brokerage service, to complement sell-side traditional research. The TIL created a server hub for the secure transmission and storage of ideas between participating firms. Trade ideas are client-specific recommendations, developed by institutional sales people, that suggest not only what stocks to buy long or sell short, but also how much money to invest, how to build the position, when to close it, and the rationale.
About youDevise Limited: youDevise Limited (www.youDevise.com) provides web-based portfolio workstations for financial markets. The company’s leading on-demand applications include the Trade Ideas Monitor (TIM), for the high-speed communication of equity trade ideas and portfolio ideas between institutional brokers and their money manager and hedge fund clients, and the Hedge Fund Information Provider (the HIP), the first commercially available portfolio management system for funds of hedge funds.
Contacts:
Simon Tizard, Executive Director
+44 (0)
781 801 2580
simon.tizard@tradeideas.org
or
youDevise
Limited
Colin Berthoud, Director
+44 (20) 7826-4302
colin.berthoud@youdevise.com
or
Anreder
& Company
Michael Shallo, +212-532-3232
Michael.shallo@anreder.com
