“Can be applied quickly to enhance trading decisions” is the advantage of VWAP or IS?
+ VWAP
• Easily understood.
• Can be computed quickly
• Computationally simple.
• Most appropriate for comparing small trades in nontrending markets (where amarket adjustment is not needed).
+ IS
• Portfolio managers can see the cost of implementing their ideas.
• Demonstrates the tradeoff between quick execution and market impact.
• Decomposes and identifies costs.
• Can be used in an optimizer to minimize trading costs and maximize performance.
• Not subject to gaming.
+ VWAP
• Easily understood.
• Can be computed quickly
• Computationally simple.
• Most appropriate for comparing small trades in nontrending markets (where amarket adjustment is not needed).
+ IS
• Portfolio managers can see the cost of implementing their ideas.
• Demonstrates the tradeoff between quick execution and market impact.
• Decomposes and identifies costs.
• Can be used in an optimizer to minimize trading costs and maximize performance.
• Not subject to gaming.