The Underlying Dog and the Option Tail. Which Wags Which?The direction of information flows in markets has long been the subject of academic debate. Automated Trader talks to Dr. Tyler Brough of Utah State University about recent papers he has co-published with colleague Dr. Ben Blau on this subject in the context of options, their underlying securities and market friction.- Seizing New Trading OpportunitiesMarkets are by their very nature competitive, but the growing prevalence of technology in recent years has only served to intensify this competition. One consequence of this is the way in which long-established trading strategies have become non-viable. However, as Steffen Gemuenden, CEO of RTS Realtime Systems explains, in a global trading environment there are still plenty of profitable opportunities - if you know how to access them.
- Lawyers to the rescue!What's the difference between a lawyer and a mosquito? One's a blood-sucking parasite, the other is an insect. What's the difference between a lawyer and a liar? Pronunciation.
- Better, faster, stronger?Eurex has poured plenty of development resource into its T7 platform and seems determined to push for more improvements. In the previous edition of Automated Trader, Ion Asset Architecture's Dennis Lohfert looked at how the new architecture was performing and the results were impressive. He follows up here with a look at the impact of the latest upgrade and considers whether Eurex can maintain its momentum.
Straight Through Workflow with Added AlphaRegulation can dramatically change trading conventions and market structure. One example of this in the ETF market is the Volcker Rule within the Dodd-Frank Wall Street Reform and Consumer Protection Act. This has fractured the ETF market making it hard for traditional buyside investors to tap the ETF liquidity they need on a request for quote (RFQ) basis. Fortunately, as Gary Stone - Chief Strategy Officer Bloomberg Tradebook - explains, there is now a solution.
Promoting transparency through data analysis on latencyTechnology is one of the most important cornerstones of electronic markets and, more broadly, of today's global markets. As technology allows for increasingly complex systems from a design standpoint, it is essential to get a clear view on each step inside a system to understand outcomes. Gathering data at discrete points within such systems is a practical way to break down the complexity and deliver digestible information.
The fragmentation factorMany, though certainly not all, of the recent higher-profile trading glitches have occurred in the fragmented securities market rather than the more liquidity-centric derivatives venues. Jim Overdahl, representing the Futures Industry Association's Principal Traders Group, talks about why responding to the technological challenges can be different for the derivatives industry than for securities venues.
EMCF and EuroCCP complete merger Dutch regulators approve additional shareholders, DTCC and BATS Chi-X Europe.
CFTC's O'Malia offers New Year resolution: getting its own house in order After another hectic year of rule-making, outspoken CFTC Commissioner Scott O'Malia said the regulator needs to prioritise rule fixes and improvements to its own methods.
SunGard buys Softputer reporting & filing solutions SunGard acquires Softputer Technologies' financial reporting and N-SAR filing solutions.