Advanced Trading Platforms (Market Focus)

Publication Date	October 2006
Publisher	Datamonitor
Product Type	Report
Pages	11
ISBN Number	not applicable
Product Code	DAT04213

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Summary

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 current business trends in the US, Europe and Asia
Examines the drivers leading to financial institutions demanding automated solutions

Highlights

The move to better manage executions has been prompted by a number of key factors. Firstly, competitive pressures in the market are causing margins to be eroded, thereby hitting top line growth figures and pushing cost driven strategies.

Sophisticated trading tools are rising in demand for lowering transaction costs, discovering hidden liquidity located amongst abundant data volumes and generating superior returns, whilst maintaining a view of risk management.

Algorithms provide a way for institutions to break down large orders into smaller lots to obtain the best possible price without significantly increasing the stock price. This solution is by no means exhaustive and must be cautiously managed.

Reasons to Purchase

Learn about business drivers behind automation in the front office
Understand the full trade flow and how algorithms can be used to achieve best execution
Learn about how algorithms are being implemented across the globe and the various regional structural factors that are affecting implementation

Content

Catalyst
Summary
Methodology
- AnaLYSIS
- The need for better execution is driving a renewed focus on front office trading tools
- Explosion of market data is putting pressure on achieving best execution
- Growth of electronic channels is permitting greater automation in the trade execution process
- Algorithms are increasingly being seen as a necessary tool to help achieve best execution
- Algorithms the key to optimally slice and dice orders
- Close management of algorithms is necessary to help traders achieve efficiency goals
- Algorithms need to be adapted to suit individual market conditions to be successful
- Certain factors of the US market facilitate algorithmic use
- European and Asian markets must overcome structural and regulatory factors that inhibit algorithmic growth
- Regulation acting as a catalyst for algorithm growth
- Traditional buy-side managers are demanding greater levels of control over execution
- Asset managers move onto the algorithmic path
Appendix
- Definitions
- Extended methodology
Further reading
- Ask the analyst
List of Figures
- Figure 1: Trading process
- Figure 2: Electronic trading growth 2000-2005
- Figure 3: Algorithmic trading strategy examples
- Figure 4: Algorithmic trading strategy examples
- Figure 5: Asian market trading details