Goldman Sachs Launches Liquidity Seeking Algorithm Sonar Dark X on Atlas Trading Platform

Rhea-AI Summary

Goldman Sachs launched the Sonar Dark X algorithm on its Atlas equities trading platform, aimed at enhancing non-displayed liquidity capture while minimizing price impacts. Leveraging a liquidity scoring framework, the algorithm helps clients navigate fragmented market venues. It features configurable logic for order execution parameters and will first operate in the U.S., with a roll-out in EMEA later this year. The introduction of this algorithm reflects Goldman Sachs' commitment to innovation in an increasingly complex global market structure.

Positive

• Innovative algorithm designed to enhance liquidity capture and minimize price impact.
• Configurable execution parameters allow for tailored client strategies.
• First mover advantage with the unique Sonar Dark X algorithm on Atlas.

Negative

• None.

Designed to navigate the complex global liquidity landscape, Sonar Dark X is the first liquidity seeking algorithm powered by Atlas, Goldman Sachs’ equities trading platform.

NEW YORK--(BUSINESS WIRE)-- Today, Goldman Sachs announced the launch of Sonar Dark X, the newest algorithm on its Atlas equities trading platform. It is the first liquidity seeking algorithm powered by Atlas and is designed to maximize non-displayed liquidity capture and minimize price impact.

Sonar Dark X leverages Goldman Sachs’ liquidity scoring framework for non-displayed liquidity, including scoring for distinct ATS liquidity segments, to help clients navigate the fragmented landscape. It is the newest algorithm on Atlas, Goldman Sachs’ equities trading platform that was introduced in 2019 as a result of a multi-year investment to evolve the firm’s global trading infrastructure, providing lower latency, higher capacity, and increased agility for product innovation.

The new algorithm also uses Goldman Sachs’ Liquidity Shield logic, which is designed to reduce parent order information leakage while seeking invisible liquidity, by balancing the liquidity quality and capture objectives throughout the life of the order by dynamically adjusting among distinct combinations of venue segments, minimum execution quantities and spread allowances.

“Global market structure continues to increase in complexity, which requires constant investment in innovation to stay a step ahead,” says John Cosenza, Head of Electronic Trading in the Americas and Global Co-Head of Product Research and Development at Goldman Sachs. “Connectivity to a broad set of accessible liquidity venues is now the minimum requirement for liquidity seeking products. In an ever-evolving and increasingly competitive liquidity landscape, the key is to optimize the subset of venue segments best suited for a specific client objective.”

Liquidity is fragmented across venues, and many venue operators offer market participants the ability to interact with distinct segments of execution counterparties. This presents a more granular level of trade-off between liquidity quantity and quality across venues and venue segments, resulting in increased client demand for both analysis and advanced navigational tools to execute.

Leveraging the Atlas platform, the Sonar Dark X algorithm is designed to capture non-displayed liquidity with minimized price impact by identifying opportunities to adjust the pace of liquidity capture based on both price desirability and block availability.

The algorithm’s logic is configurable, enabling clients to set order execution parameters, including target participation percentage bands and block allocation amounts across different Execution Styles (Passive, Neutral, and Aggressive). Within such preferences, the algorithm then dynamically manages the relationship between liquidity capture, current stock price and reference price.

The new Sonar Dark X algorithm, which has been deployed in the U.S. and is expected to rollout in EMEA later this year, uniquely positions Goldman Sachs to navigate the ever-evolving liquidity landscape.

About Goldman Sachs

The Goldman Sachs Group, Inc. is a leading global financial institution that delivers a broad range of financial services across investment banking, securities, investment management and consumer banking to a large and diversified client base that includes corporations, financial institutions, governments and individuals. Founded in 1869, the firm is headquartered in New York and maintains offices in all major financial centers around the world.

View source version on businesswire.com: https://www.businesswire.com/news/home/20221004005155/en/

Nick Carcaterra

Nick.Carcaterra@gs.com

Source: Goldman Sachs

FAQ

What is the Sonar Dark X algorithm by Goldman Sachs?

Sonar Dark X is a liquidity seeking algorithm launched by Goldman Sachs on its Atlas equities trading platform, designed to optimize non-displayed liquidity capture.

When will Sonar Dark X be available for clients?

The Sonar Dark X algorithm is currently deployed in the U.S. and is expected to roll out in EMEA later this year.

How does Sonar Dark X improve liquidity capture?

It utilizes Goldman Sachs’ liquidity scoring framework and configurable logic to reduce price impacts while maximizing liquidity capture.

What is the significance of the Atlas platform for Goldman Sachs?

Atlas is Goldman Sachs' equities trading platform that enhances global trading infrastructure through lower latency, higher capacity, and increased product innovation.

Who is responsible for Goldman Sachs' electronic trading?

John Cosenza is the Head of Electronic Trading in the Americas and Global Co-Head of Product Research and Development at Goldman Sachs.