The Gateway to Algorithmic and Automated Trading

Stockholm Syndrome

Published in Automated Trader Magazine Issue 32 Q1 2014

The Swedish word lagom doesn't have a direct equivalent in English. Loosely translated to mean 'in moderation', it's basically all about finding the right balance. Lagom is something of a mantra for Swedes, who seek it in all aspects of life. So, as Adam Cox reports, it should come as little surprise that the concept of lagom appears to have been a guiding principle in the development of the Swedish marketplace.

In 1924, Henry Ford established operations for his burgeoning auto empire in Stockholm's docks area, building a factory to produce his much-sought-after cars. Fast forward 80 years and another company with big ideas, OMX, took over that factory and transformed it into a financial nerve centre for the Nordic region.

It's a fitting prelude for a company that helped usher in the start of algorithmic trading in Sweden. Ford was known for being both conservative and revolutionary, and Sweden's approach to the transformation of its financial landscape has been similar. It has welcomed high-frequency players but at the same time sought to rein in excessive order traffic.

Lauri Rosendahl, senior vice president and head of Nordic equities and equity derivatives at NASDAQ OMX, reckons that Sweden, and the Nordic region in general, has been a bit late to the party in terms of algorithmic trading.

"When it comes to HFT or automated algorithmic trading, compared to the US, I would say that we were slightly behind the development that happened in the biggest European markets, in particular Great Britain," Rosendahl said.

But that hardly bothers Rosendahl. For a start, he said the Nordics -- at least based on NASDAQ OMX's experience -- have been picking up ground quickly in the past few years. More importantly, he sees trends towards healthier trading activity.

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