The Evolution of Algorithmic Trading (Strategy Focus)

Introduction

As financial institutions battle with ongoing competitive pressures, there have been radical transformations in trading systems in global markets. Institutions are looking for advanced trading platform functionality in order to gain the ever important competitive advantage.

Scope

• Discusses the changing nature of the buy-side / sell-side trading relationship
• Examines the future trading tools being developed for superior performance

Highlights

Once the choice to use an automated strategy has been made, the question of which specific algorithm to implement then has to be addressed. The ability to rate and rank algorithms through effective Transaction Cost Analysis (TCA) is increasingly seen as the key to successful performance.

Whilst algorithms in the past have predominantly focused on equities, as the market evolves demand for algorithmic tools that go beyond the traditional realm of the equity world is steadily rising. This has been driven heavily by the presence of multi-asset class hedge funds.

The ability to tweak sell-side algorithms is a major trend likely to continue to occur in the new wave. By streamlining the process of algorithm alteration, an increasing amount of power is being placed in the hands of the buy-side trader. It is yet to be seen how much power the buy-side will take from their sell-side counterpart.

Reasons to Purchase

• Understand the algorithmic trading environment of the future
• Learn about next generation algorithms targeted at achieving competitive advantage