The Gateway to Algorithmic and Automated Trading

Automated Trader Magazine Issue 03 October 2006

It is a common boast among magazine editors that they are “in touch” with their readership. However, the sad reality is that in the case of many magazines that cater for the professional financial market the most common form of reader feedback is probably a writ.

Therefore, it has been a pleasant surprise that after just two issues of AT the editorial mailbag is already filling out rapidly with communications of a less litigious nature. A common theme, particularly from the buyside readership, has been an interest in hearing more about the direction order management systems (OMS) have been taking. So we went and asked the people who make them in considerable detail on pages 64-70.

Just to make sure we were getting a wide angle on this, we also looked for an external viewpoint. Sang Lee of Aite Group kindly obliged with a typically rigorous look at order management systems and how they interact with their younger execution management systems cousins on pages 50-54. After so much hard work we felt some OMS R & R was deserved and that appears on pages 38-39 in the guise of AlgoComix, though it of course includes a serious underlying message.

To judge by the mailbag, another topic that has piqued buyside interest is multi asset algorithmic trading. After talking to four major sellside algo providers in the AT Round Table on pages 40-49 the consensus seemed to be “a fair way to go”. But then our Leader article by David Rutter of Brokertec tells a slightly different story. And our regular Exchange Views item implies that at least one major exchange is already lining up its multi asset algoducks.

If multi asset algorithmic trading is going to take off, a lot of algorithms will need to be implemented in OMSs and assets such as fixed income will need to join the party. On the first point, that means someone needs to come up with a standardised way of implementing algos, and John Goeller explains how FIX is doing just that on pages 34-37. On the second, the received wisdom is “not a hope”, but some of the buyside and sellside interviewees in our Market Place feature clearly disagree.

Finally, this issue sees the debut of AT’s new Peek Ahead column. No reader of any description has requested this.

Andy Webb - Editor Issue 03

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