Best Execution
When Trading with Bitcoin Suisse, all clients benefit from our unique approach “Best Execution”, ensuring they receive the best possible result for their trades. Applying Best Execution comes with many considerations, simply trading at the best price on the market is not all it takes to guarantee this approach. Other crucial factors are the likelihood and speed of execution, analyzing the order book depths as well as identifying the best venue(s) to execute while maintaining a sound and tight counterparty exposure. In simple terms, Best Execution means to execute an order in a way that is most advantageous for our clients. In addition, when placing your order with Bitcoin Suisse, you profit from minimal counterparty risk.
Our guiding principles are captured in our Best Execution Policy. In the following, we highlight the concrete benefits our clients can derive from trading with Bitcoin Suisse, available order types, our multi-exchange setup as well as financial and operational risks involved in crypto trading, which we help reduce for our clients.
What are the benefits of Best Execution for clients of Bitcoin Suisse?
Price
Our Best Execution approach is geared towards achieving the best price for our clients. This is being accomplished by algorithmic smart order routing, a wide and diverse network of trading venues, dynamic trade pre-funding and our long-lasting crypto trading expertise. Typical order types that use smart order routing to achieve a better price are for example:
- Smart Execution Order: Continuous posting of order slices to trading venues through algorithmic smart order routing aiming to minimize market impact and achieve a more favorable price;
- Soft Limit Order: Smart Execution order with limit price (cap/floor). Order is being executed as long as market price is above (sell order) or below (buy order) the limit price.
Speed
For some orders, execution speed might be a priority. At the same time, prioritizing speed as an execution factor may result in an opportunity cost wherein the achieved price might be inferior compared to executing the order without any time constraints.
In such cases, we offer several options to our clients:
- Instant execution: Immediate trade execution sourcing the best obtainable market price at this point in time (market order);
- Scheduled Order: Smart Execution order with a fixed execution deadline without a fixed time interval. Completion of the order can occur before the end of the execution deadline;
- TWAP (Time Weighted Average Price): Smart Execution order with a fixed execution deadline, split into smaller slices per fixed time interval (can be defined by Client). If interval ends without slice being fully executed, a market order is executed for the remainder of the order.
Liquidity
There are two types of Liquidity relevant for executing trades, the first being market liquidity, describing the order book depth of a crypto asset – “how much can you trade at a given price x?”, with the second being funding liquidity, which is required by trading venues to facilitate trading and settlement.
Market liquidity heavily varies depending on the token to be traded. Bitcoin, Ether and some larger altcoins by market capitalization (DOT, ADA, etc.) usually exhibit a healthy order book depth and permit reasonably sized trades, while the order books of smaller altcoins by market capitalization are less liquid. Large trades, if not executed in a smart way, may potentially cause material price changes and not every token is available for trade on every exchange. Therefore, a diversified network of crypto trading venues (exchanges, brokers, etc.) can help not only to increase the available liquidity, but also to trade crypto assets that are not extensively listed across cryptocurrency markets. The greater the liquidity available, the narrower the spreads – which translates to better prices.
Most of the available crypto trading venues require pre-funding. Accordingly, managing funding liquidity is a key feature of our Best Execution approach. Within this approach, we allocate liquidity on a need-to-have basis by considering historical trades, trending tokens and our time-tested expert judgement. In line with the expected liquidity need, we deploy funding to the trading venues. If the allocated liquidity is insufficient for a large or exotic trade, our ad-hoc funding process ensures swift on-time funding and a fast reaction time.
Security
At Bitcoin Suisse, our clients can trade with minimal counterparty risk, as we take over the counterparty risk from exchanges and other trading venues for our clients. This requires a strict application of our risk management framework and a regular reassessment in line with market sentiment, risk events and our house opinion on market trends and developments.
All our venues must fulfill certain minimum criteria to be onboarded as an eligible trading counterparty for Bitcoin Suisse.
Transparency
Our Best Execution Policy transparently outlines the guiding principles, priorities and other factors relevant to Bitcoin Suisse’s order handling. On request, we will provide our clients with documentation and records proving that orders have been executed in accordance with the execution factors in our Best Execution Policy.
How does multi-exchange-trading compare to single market execution?
As a crypto broker, Bitcoin Suisse trades across the most relevant crypto exchanges and over the counter (OTC) desks. Trading over multiple exchanges instead of only one exchange is particularly advantageous for larger trades as it increases the available market liquidity considerably. It also enables Bitcoin Suisse to execute the order in a way that minimizes market impact in addition to the minimal counterparty risk for our clients. Upon completion of the desired order amount, our clients receive the actual traded price – which is typically more favorable than that of a single-exchange market order.
The illustration below shows how advantageous Best Execution with multi-exchange trading is compared to single market execution throughout selected currency pairs.
