21.11.2019 / 15:07

FORRS Maturity Model: Automatic order placement and order execution – Get your organization ready for automation in short- and long-term trading

Energy Markets

Algo Trading

The FORRS Maturity Model helps your organization to find its right maturity level of automated trading strategies. Level 1 of our Maturity Model introduces automated order placement and order execution which is the key component for a fast, efficient and more profitable energy trading landscape across different commodities – and the basis of any further automation and algorithmic trading.

Finding and maintaining profitable business cases for energy suppliers and commodity traders is getting more and more competitive. Operating power plants profitably on spot markets is not only more competitive due to unfavorable prices for energy, gas, coal, CO2 but also due to large investments from competitors into their trading infrastructure with the clear goal of increasing their level of automation. We observe this especially in power and gas spot trading. More and more players operate with fully automated processes for power and gas order generation and execution during continuous trading phases but also for auctions. An example of this includes automatically processing trading signals from power plant optimization models, properly slicing those signals into tradable orders and placing those orders fully automated in market order books to gain a price advantage compared to competitors. The key component here is to be fast and precise. The speed of execution is a decisive factor to achieve best prices.

No matter if you are seeking to introduce a third-party system for order execution or if you are aiming towards building a complete in-house solution, it is crucial to understand the different types of execution orders that leverage your trading strategies. Once running simple types of execution orders like market and limit orders correctly, market players realize quickly that smarter order types such as iceberg orders help you realize your target prices on trading markets.

Level 1 of our Maturity Model replaces manual processes and workflows around order execution by a competitive automated trading landscape. Achieving Level 1 ensures that all relevant connectivity is available, such as the connection of your automated trading platform to an ETRM/CTRM and that deals are nominated properly by your nomination tool. Generating orders by multiple algorithms requires an internal market functionality for order netting which is also embedded in Level 1 of the FORRS Maturity Model.

Level 1 enables you to enter the playing field of competitive automated trading. Any further level of the FORRS Maturity Model will ensure an increasing professionalization of your execution infrastructure. By applying our Maturity Model, we are able to develop a roadmap to build a state-of-the-art trading landscape, based on your individual requirements. Level by level you will be able to improve your trading capabilities in a guided and structured way to be ready for the next level of trading automation.

Take advantage of our long experience in automated and algorithmic trading and learn which level of the FORRS Maturity Model is most suitable for you.

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