Implementation shortfall Q manager, advantages, activity

Howd

The first advantages of Implementation Shortfall(IS) is:

* links trading to portfolio manager activity.

Why is it an advantage of IS, but not an advantage of VWAP? Thanks. (Notes: not in Schwsr).

liangfeng

IS takes into account implicit cost like delay cost and opportunity cost all of which are linked to portfolio manager's activity.

VWAP does not capture these implicit cost.

dyga

bell99 Wrote:
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> IS takes into account implicit cost like delay
> cost and opportunity cost all of which are linked
> to portfolio manager's activity.
>
> VWAP does not capture these implicit cost.

Thanks, bell99. ...I had a hard time to understand the statements of Execution chapter.

pennyless

deriv108 Wrote:
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> thanks, bp.
>
> One of the disadvantage of IS is "imposes an
> unfamiliar evaluation framework on traders".
>
> Simply put, does it means that IS strategy gives
> the portfolio managers more "power" over the
> traders?

It means not many traders know what it is.

NO EXCUSES