The Gateway to Algorithmic and Automated Trading

Automated Trader Magazine Issue 37 Summer 2015

Anna Reitman

Whether you like it or not, the financial industry’s infrastructure of the future is happening now. And just like any community living with a massive construction project underway, there’s plenty of dissent, debate and maybe even a bit of fear on how it will change things.

On the trading side, we examine swap execution facilities – the US’ answer to pushing over-the-counter derivatives onto the counter (page 12). It’s still taking shape, proprietary trading firms are actively engaged in development, but there may yet be too much scaffolding up to really see how the architecture fits against the skyline. Could that mean the opportunity is now?

In the post-trade space, we see the struggle between draft plans and actual build. Adam Cox brings us a special report on post-crisis plumbing (page 20). He finds a global industry coming to terms with regulator’s expectations as a number of initials start entering the mainstream – TRs, CSDs, CCPs, et al. We also put the spotlight on CCP risk, which some experts argue is the next too-big-to-fail concern in the making (page 69).

If there is one point of agreement among every corner of the market throughout this process, it is that there is a deluge of data coming (page 39). Neil Ainger checks out how firms are coping with the demands of huge volumes of data and why “it’s like hell on earth”.

Spanning the category of both trade and post-trade is collateral management, which is morphing into some kind of frontback office hybrid in the post-crisis world (page 64). That means technology is becoming more and more sophisticated, and quants are part of the solution in making things run smoothly.

Regulatory think tank JWG Group updates us on the global landscape of shifting legislation (page 60). Even as the structures are going up, there’s architects and engineers battling it out on the ground. Find out where the stress points are.

In our regular buy side interviews, we talk to Risk Navigator (page 32), Katy Kaminski from CTA Campbell & Company, and Risk Warrior (page 52), Miranda Ademaj from Skënderbeg Alternative Investments. They have a lot to say about their views on risk, trading and investment.

We also decided that summer was as great a time as any to visit India (page 47). There may be some ups and downs in the economy, but it’s still arguably coasting on a wave of optimism. And that means firms investing into more sophisticated market tech could see a big payoff. Priyanjana Bengani reports on the algorithmic trading community in India.

The winner of our ‘Best of the Blogs’ (page 62) goes to Bloomberg Tradebook. Gary Stone and John Gardner write on the negative regulatory impacts on liquidity for US equity and index options, and the struggle for buy side to find a match.

Finally, in Peek Ahead (page 80), we think about the lessons learned since the arrest of Navinder Sarao, agent of market meltdown doom operating out of a modest house in a London suburb.

Anna Reitman

Editor

annar@automatedtrader.net

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