Transtrend is a systematic investment manager with a strong focus on intelligent, adaptive execution. Significant effort goes into ensuring that execution is both precise and responsive to market conditions. Supported by a robust technological foundation, Transtrend’s research, portfolio management, and trading teams collaborate closely and share a deep commitment to active market participation.
A passion for trading and learning
Even by Transtrend’s standards of long staff tenure averaging over 10 years, Dutch American Marc Putter stands out, having been with the firm for over 25 years. “I started as a trainee money broker in London but after two years realized I was not suited to the old school barrow boy trading floor shouting matches. I came to Transtrend not so much for the location in Rotterdam but rather to embrace lifelong learning. My father was a vegetable oil trader for most of his career and I was aways inspired by him. While his focus was on physical commodities, we trade multiple markets and asset classes and Transtrend is a great place to learn so much more.”
Even after 25 years every day is different and there is always something new going on. “Transtrend and the whole industry are constantly developing and evolving and we actively participate in this. It is never easy to suss out markets – and whenever you think you have worked them out there are always new ideas and nasty surprises! The same news moves markets in different and unexpected ways,” reflects Putter.
“Transtrend and the whole industry are constantly developing and evolving and we actively participate in this. It is never easy to suss out markets…”
Since all Transtrend traders work in the firm’s one and only office in Rotterdam, they work shifts to trade markets globally across multiple time zones. “I still do early mornings and late nights – including some work after midnight – and I really enjoy the variety. I know that rhythm might not work for everyone, but for me, it’s my comfort zone,” notes Putter.
“Liquidity provision” and price sensitivity
At Transtrend, the focus is on executing trades in a way that seeks to capture additional liquidity risk premium. Rather than simply taking liquidity, the firm aims to approach execution with the mindset of a liquidity provider – seeking control and better pricing where possible. “We are not a liquidity provider per se like a market maker, but we have adapted our execution approach to trade in a liquidity-providing fashion. Whenever possible we try to pick up risk premia and find opportunities to make trading smarter and more efficient. Of course, as a trend follower we cannot always do this, but we try to strike the right balance,” explains Putter.
“Whenever possible we try to pick up risk premia and find opportunities to make trading smarter and more efficient. Of course, as a trend follower we cannot always do this, but we try to strike the right balance.”
In some cases, after a large move when volatility in a market has also increased, Transtrend can be trading around the trend – perhaps lightening up a long cocoa position after the market went parabolic in 2024 or covering part of a short position after a spike down. In other cases of more steady and orderly trends Transtrend is more likely to be trading in line with the trend but always takes an active approach to execution.
“Futures markets trade on electronic lit exchanges so that what you see is what you get. But they function best when there is active participation from all sorts of participants. Active participation in markets is a responsibility because if everyone left orders to fill at the VWAP (Volume Weighted Average Price) the market could flatline all day. We adapt our best execution benchmarks to the intention of the order, because TWAP (Time Weighted Average Price), VWAP, or Settlement Price are not suitable to our strategy that is highly sensitive to price and precision,” explains Putter.
In practice the execution tactics are adapted to the situation: “We may participate more passively or engage actively depending on the context and opportunity. We never send a market order and prefer to work with limits. Some are more aggressive than others and they will not all get triggered in a single day. For example, we do not shy away from trying to trade within the bid/offer spread,” elaborates Putter.
“We may participate more passively or engage actively depending on the context and opportunity. We never send a market order and prefer to work with limits.”
Transtrend manages over USD 4 billion in its Diversified Trend Program and has a sizeable presence in some smaller markets that can be carved out as “alternative markets” by some other funds though Transtrend trades everything in the same strategy. “When we are relatively large in certain markets we have a special responsibility, including smart and non-disturbing execution,” points out Putter.
Flexibility in execution and participation
The vast majority of trades are executed algorithmically, using in-house developed strategies designed to actively manage execution. “You have to strike the right balance between how active and how passive your execution should be,” Putter explains.
Where voice trading is used – which is only a small portion of the overall activity – the same execution principles apply. Instruments are mainly futures though there are some swaps on equities and interest rates, while FX, freight and electricity can be traded OTC. Transtrend is not restricted to trading only electronic markets in the way that some systematic funds are.
“You have to strike the right balance between how active and how passive your execution should be.”
The trading execution team works very closely with portfolio management and research teams – all sitting in the same open plan office. This close collaboration allows for seamless adaptation when market conditions shift. Traders sometimes need to make a judgment call when market conditions change while an order is working. Execution algorithms need to adapt and adjust in real time while staying faithful to the original objective. “If conditions become less opportune, the algo adapts accordingly,” points out Putter.
Traders are pilots
Marc Putter views traders as pilots of an advanced and highly engineered aircraft. “When people interview for a role we do not want reactive traders. We want proactive traders who love flying and love feeling in control. They need to understand how the plane is built and need to be prepared to roll up their sleeves and get their hands dirty,” stresses Putter.
“We want proactive traders who love flying and love feeling in control. They need to understand how the plane is built and need to be prepared to roll up their sleeves and get their hands dirty.”
Transtrend tries to filter out as many “unknown unknowns” as possible. “But they do happen – and when these unknown unknowns arise, we trust our people to promptly recognize the issue and be able to act on it,” says Putter. Traders are trained to understand systems, anticipate issues and take over when necessary. “They need to know the why as well as the how,” says Putter.
Traders’ roles are growing as Transtrend’s strategy is becoming more flexible and more complex. “Our execution systems also need to filter out noise and less relevant information so that we do not get swamped by it all. It is essential to stay effective as the landscape evolves,” sums up Putter. “Orders need to be channelled to different venues, and a big project is building proprietary visualisation tools. I would even like to add various sound alerts as well but the developer has overruled me on that!,” admits Putter.
This article features in the “Systematic Strategies and Quant Trading” publication below:
