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OKCoin Adds Algorithmic Trading Tools to Attract High-Volume Investors

(@pete_rizzo_) | Published on June 23, 2014 at 17:05 BST

OKCoin

China-based bitcoin exchange OKCoin has announced the introduction of new algorithmic trading tools designed to give its international investors more control over high-volume market activities.

As part of the rollout, the Beijing-based company has launched three new features meant to eliminate pain points common to these larger orders:

  • Icebergs – which allow large volume orders to be subdivided into many smaller orders
  • Modified time-weighted average price orders – designed to combat the price slippage that can result from large trades
  • Trigger orders – which give users more control over conditions for trading

Increasing sophistication

OKCoin CEO Star Xu framed the service launch as one that would better position the exchange to compete domestically and internationally for sophisticated investors, stating:

“By bringing professional trading technologies from the traditional financial world, OKCoin hopes to boost the growth and maturity of bitcoin trading. Bitcoin trading is still in its infancy, historically­ speaking, but many of the investors involved are quite sophisticated."

The company credited the product launch to the efforts of Changpeng Zhao, the company's Chief Technology Officer and a former senior executive at Blockchain.

Zhao, who is also a former Head of Research and Development for Bloomberg Tradebook Futures, went on to suggest that OKCoin may be seeking to continue to harness his previous experience as it seeks to expand its services, explaining:

"I am excited that I can leverage my Wall Street experience directly at OKCoin, and I see many opportunities for the company to fill gaps and shortfalls within the bitcoin trading ecosystem."

International appeal

The launch comes just days after OKCoin reintroduced its peer-to-peer (P2P) margin trading services, and further follows the introduction of its English-language website.

Both launches seem to frame OKCoin as a global bitcoin exchange that extends beyond the regulatory uncertainty common to its host country.

This viewpoint was also hinted at by Xu, who avoided using China-specific language when discussing the product launch. Xu said:

"OKCoin is committed to the continued enhancement of our trading tools and service offerings, and we will not stop until our platform offers all of the same trading services and options that one might expect from world-­leading financial exchanges."

Targeting slippage

Bitcoin's institutional investors have recently noted that current exchange trading solutions are not optimised for high net-worth clients.

For example, Binary Financial's Managing Partner Harry Yeh recently told CoinDesk that the upcoming US Marshals Service (USMS) auction of nearly 30,000 bitcoins confiscated from Silk Road has become appealing to his firm's clients for providing a viable solution to real investor concerns.

Yeh explained how large buyers often pay an above-market price for large bitcoin orders, as the act of buying such a large volume of coins causes price slippage, whereby investors force the price of bitcoin to rise as their orders are being filled.

Should OKCoin's service provide a solution, Yeh's comments suggest that they may help the exchange connect with a valuable and underserved niche in the bitcoin community.

Image via OKCoin

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