6

Step 6Trade Allocation

Trade allocation is a service usually provided by sell-side firms for their customers (see Figure 4.6). The goal of the process is to map orders received from the buy-side firm to executions created in the markets. Computing an average price can be complicated in several ways. For example, more than one buy-side account may participate in a single order.

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Figure 4.6 Step 6: Trade allocation employs data from a trade report, or reports, and account details from the customer to compute an average price for transactions and apportion the average prices to the accounts involved.

When multiple accounts are involved, the accounts ...

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