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What forces will shape the markets?

Published in Automated Trader Magazine Issue 27 Q4 2012

Automated Trader launches its latest industry-wide survey What types of trading models are in vogue? Which technologies will win the day? Where is liquidity on the rise? How will the industry cope with the approaching regulatory tsunami?

These are just a few of the burning questions that Automated Trader will be answering with its next survey on global trading trends, the most comprehensive report on the subject available. The new survey has just been launched and it promises to shed more light than ever before on some of the most pressing issues facing the markets. Automated Trader is encouraging all of its readers to take part. Since regulation has been one of the hottest topics over recent months, a special set of questions has been added which will show which segments are most concerned, what worries them the most, and what the likely result of some of the proposed changes might be.

Data from previous years has been widely cited by senior central bankers, regulators and academics, underlining the survey's high visibility in important circles. As such, the survey represents an opportunity for people in the financial community to have their views counted and to influence future policy.

2011 survey: Planned level of Automation within 2 to 3 years

2011 survey: Planned level of Automation within 2 to 3 years

Last year, 515 market professionals from a broad cross-section of both buy- and sell-side firms globally took part. The significant body of data that resulted signalled a number of emerging trends. Among the insights correctly predicted from the last survey were:

  • rapid growth of machine-readable news and social media analytics
  • a dramatic increase in FX-related activity
  • the significant uptake of FPGA technology
  • automation throughout the entire trade life cycle

Jean-Jacques Duhot, former global head of strategic risk at CIBC World Markets, and now a portfolio manager at a leading hedge fund, called the survey "inspirational".

Professor Dave Cliff of Bristol University, a prominent academic who focuses on automation and large-scale computer systems, said the survey offered the most comprehensive examination of modern trading practices available, adding that it provided much-needed objective insight into what firms were actually doing and thinking.

2011 survey: Types of model planned within two to three years

2011 survey: Types of model planned within two to three years

Partnering with Automated Trader in this year's survey are Bank of America Merrill Lynch, Eurex Exchange, Equinix, and RTS Realtime Systems.

"The report from last year's survey provided a thorough and very detailed analysis of the key trends emerging globally," said Brian Schwieger, head of execution services at Bank of America Merrill Lynch. He said his bank was eager to support such research.

John Knuff, general manager of the financial services division at co-location firm Equinix, said statistics on co-location usage provided a leading indicator on a number of fronts.

"They provide valuable insight into market liquidity and offer valuable indicators of where the industry is headed," Knuff said. "For example, the planned adoption rates of co-location for individual cities is often a precursor to an increase in trading activity and volumes in that region. We are very interested to see how the trends revealed in last year's survey have continued to develop, influencing volumes, stock spreads and transaction costs."

2011 survey: Latency Sensitivity (Question Sponsored by Interxion)

2011 survey: Latency Sensitivity (Question Sponsored by Interxion)

Steffen Gemuenden, CEO at RTS Realtime Systems, said it was important for a global solutions company such as his to be able to anticipate where the market was going and what technology was gaining traction. "The data from these surveys helps us to focus our development efforts, keep ourselves and our customers ahead of the curve and provide them with technology that gives them a trading edge," Gemuenden said.

Wolfgang Eholzer, head of trading system design at Eurex Exchange, echoed that view. "One of the challenges for any trading venue is maintaining a balanced order book that includes participation from a wide range of different types of participants," he said.

"By providing insights into the developing trends, the survey helps to confirm that both current and planned platform functionality caters for the specific needs of each category of investor."

Click HERE to go to the 2012 survey

All participants will receive a free three-month Platinum subscription (or extension to an existing subscription) to Automated Trader Magazine, as well as a pre-publication summary of the findings. All participants also will be entered into a draw for a $800 Harrods gift voucher and separate prizes from Equinix and RTS. Survey responses are completely confidential.

2011 survey: Latency Sensitivity by Asset Class (Question Sponsored by Interxion)

2011 survey: Latency Sensitivity by Asset Class (Question Sponsored by Interxion)