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Business Insider: A self-learning trading venue has raised $9 million

LiquidityBook

Amanda Perrucci

Amanda Perrucci

A trading firm that is trying to solve one of the biggest headaches in US stock trading has raised $9 million to build out its artificial-intelligence-powered matching engine.

Backed by investors including Point72 founder Steve Cohen, Imperative Execution is aiming to lure large investors away from established stock exchanges such as the New York Stock Exchange and Nasdaq by lowering the cost of executing a large trade. While the cost of trading for retail investors is racing towards zero, institutions are seeing this cost increase for stock trades of a certain size.

In recent years, firms have had to focus more of their energy on lowering execution costs for bigger trades over the cost of constructing portfolios, Imperative Execution founder Roman Ginis said. “If you ask someone at Fidelity how much they pay on portfolio construction versus execution quality, you will see that the latter is becoming more important.”

Its matching engine leverages AI technology to lower the cost of slippage for large trades. Unlike other venues, it doesn’t execute trades on a continuous basis. Rather, it executes them at a distinct point in time.

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