Bank of America buys algorithm trading specialist

Bank of America Corp., the No. 2 U.S. bank, on Monday said it had bought Financial Labs LLC to boost its use of algorithm-driven electronic trading in foreign exchange and into other asset classes.

Terms of the deal were not disclosed.

"Building on our success in electronic trading in equities, the Financial Labs acquisition accelerates our already strong momentum in foreign exchange electronic trading, and positions us to extend our expertise into other markets," Mark Werner, head of Global Markets, said in a statement.

Algorithmic trading is a sophisticated electronic method of breaking large orders into smaller ones and sending them to the market according to pre-set parameters.

One benefit of this type of trading is that it can offer a level of anonymity to investors who want to execute a large order without flagging their intention to the market.

The method is typically used for large-cap stocks that have high volume and liquidity.

Bank of America has already been tuning existing algorithmic solutions to mimic the trading patterns of small and mid-cap stocks.

But industry experts have said there is potential for further growth in asset classes aside from equities, such as options, futures and foreign exchange.

Bank of America said the acquisition, which includes Cambridge, Massachusetts-based Financial Labs' team of mathematicians and astrophysicists, was structured as a purchase of selected assets from the company.

What are people saying about mortgages today:

Rates on 30-year mortgages edged down last week to a seven-month low. Mortgage-giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages fell to 6.3 percent, down slightly from 6.31 percent two weeks ago. It put rates at the lowest level since they were at 6.24 percent the first week of March.

Bank of Hawaii, Central Pacific Bank, Territorial Savings Bank and Wells Fargo Home Mortgages all cut their 30-year mortgage rates to 5.75 percent this week.

Most people think of a mortgage as a means to an end. After all, you buy a house, not a home loan. But a mortgage is much more than the path to homeownership. It is a financial instrument that must be managed, just like any other financial investment.