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Going global

Published in Automated Trader Magazine Issue 19 Q4 2010

It began with foreign exchange, but now futures markets are racing to go global and that could have a profound impact on financial markets everywhere. Bob Giffords examines the strategy implications of this evolution.

FX has pretty much always been a global market - if you count camels crossing borders as at least a potentially global transmission mechanism - and since the demise of Bretton Woods, the lifting of exchange controls, the introduction of the Euro and the recent arrival of once-obscure proxies on global markets in their own right, it has been big. Now futures are also becoming global, as the number of fungible or correlated products around the world has increased. There has been a huge growth in global futures, both as a stand-alone strategy and as a cross-asset or cross-geography hedge along with other asset classes.

This could have a profound impact on financial markets everywhere, and indeed, it may represent the greatest as-yet untapped opportunity for automated traders since - well, FX went electronic. Bob Giffords examines the strategy implications of this accelerating futures evolution.

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