Alpha capture system

An alpha capture system is a computer system that enables investment banks and other organizations to submit "trading ideas" or "trade ideas"^[1] to clients in a written electronic format, for example TIM Group's TIM Ideas product or Bloomberg LP's Trade Ideas product.^[2]

Introduction

Financial Services Authority Markets Division: Newsletter on Market Conduct and Transaction Reporting Issues, Issue No. 17, September 2006,^[3]

First used in 2001 by Marshall Wace^[4] they are an alternative to the traditional stockbrokering approach of communicating ideas and strategies to clients face-to-face or over the telephone.^[3]

Terminology

The term alpha capture refers to the aim of such systems to help investors find alpha or market-beating returns on investments.^[5]

Submitted trade ideas are accompanied by a rationale, timeframe and conviction level and enable investors to quantify and monitor the performance of different ideas.^[4]