JonesTrading Outsourced White Paper – Outsourced Trading Vs. Insourced Trading: A Comprehensive Examination

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Executive Summary

Receiving trading services for variable commission dollars is not a new concept—outsourced trading firms have roots dating back as far as hedge funds. However, over the last five years, there has been a dramatic shift in both the levels of service offered by outsourced trading firms and the types of clients they now serve. Due to the pressure on fees and other trends such as MiFID II, outsourced trading is one of the most talked about and fastest growing components in the alternative and traditional asset management industries.

This paper seeks to evaluate two main topics:

  • What are the different levels of service available via outsourced trading and how do they compare from a cost and functionality standpoint? 
  • What are the most important elements and associated costs of an internal trading desk?

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