The Automated Trader Blog: Diary of an Investigation
Automated Traders latest addition to the team is on a path of discovery. In an industry where the lines are not always clear cut David Dungay attempts to dissect relevant issues through a journey of interviews and research. With regular blog updates David brings you information as he finds it. He will construct his thoughts with the thoughts of others to openly build his finished articles to be found in the published magazine every quarter. David is the youngest member of the Automated Trader team and with it brings his enthusiasm and inquisitive nature to bear.
The opinions expressed by the following bloggers and those providing comments are theirs alone, and do not reflect the opinions of Automated Trader or any employee thereof. Automated Trader is not responsible for the accuracy of any of the information supplied by these bloggers.
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Diary of an Investigation - Day five
posted Fri, 18-12-2009
I managed to have a chat with Paul O’Donnell, COO BATS, and author of the white paper report on MTF price formation. Paul is adamant that the MTFs are already capable of price formation and his report provides evidence of that nature. “The liquidity on our market didn’t change and it was absolutely rock solid the whole way through the outage. It is absolutely the case that when the LSE is gone there is enough liquidity to sustain the book.” Paul also gives his views on a possibl...continued
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Diary of an Investigation - Day four
posted Mon, 14-12-2009
I spoke to Kee-Meng Tan at Knight and he gives his concise view point. Kee-Meng explains that people are already starting to react to outages in terms of the way they program their SORs. Perhaps the LSE have used their trump card for the last time. If people have adjusted to this scenario, or will do shortly, then surely they won’t be able to stop order flow going to the MTFs? “The first time the LSE went down, people didn’t know how to handle it, but this time around there were people...continued
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Diary of an Investigation - Day three
posted Tue, 08-12-2009
I have spoken to Richard Balarkas from Instinet and he had some very interesting points to make about SOR (Smart Order Routing). We are behind the US in terms of the functionality of our SORs but that’s probably down to the complexity in our markets. Clearly not happy with the auction that took place Richard explains it is not only hampering investors but can often leave brokers holding the slack. “I think the way in which the LSE addresses these problems needs to be looked at very carefully b...continued
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Diary of an Investigation - Day two
posted Fri, 04-12-2009
Spoke to Todd Golub, COO at Nasdaq OMX Europe and Steve Grob, Director of Strategy over at Fidessa. Both make interesting points re the LSE’s handling of the outage. Todd says he’s not happy with the LSE going into an auction status but he seems clear about what the future will hold. “There are certainly some firms out there that feel comfortable enough in defining their own market that they aren’t necessarily relying upon the primary market.” Steve likes to play devil&rsquo...continued
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Diary of an Investigation - Day one
posted Wed, 02-12-2009
The LSE suffered another outage last week (LSE Statement). The same thing happened on 9th November. But these two are different. A few weeks ago the outage that occurred didn't stop trading across other venues. Traders were able to move their order flow via other platforms. This outage left the LSE defending claims by some that a dramatic shift has occurred in the space of the last few months, and the LSE's dominance as the UK's prime execution venue has now been neutered by the MTFs. The outage that occur...continued
