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Low latency connectivity has enjoyed a resurgence of interest as high-performance trading architectures become a reality. Early interest in the low-latency ‘vision’ may have been interrupted by the global financial crisis, but no matter: low latency is back, and providing the catalyst for the explosion in high frequency trading.
As liquidity continues to fragment – in the US and globally – electronic trading operations are demanding connectivity to a broader array of execution venues. As well as traditional exchanges, traders today need access to alternative trading systems, including electronic communications networks, dark pools and multilateral trading facilities (MTFs). Securing and maintaining a robust, high-performance connectivity solution is key to providing comprehensive market access.
In 2010, financial markets participants will continue to expand their trading activities as liquidity increasingly becomes fragmented, seeking alpha in new markets, best execution in dark pools, arbitrage opportunities across the order book and by implementing high frequency and complex, multi-leg, cross asset class strategies.
Today speed is crucial to any trading venue that wants to stay competitive. At the same time, with high-frequency trading gaining an increasing share of overall volumes, the ability to manage rising transaction volumes is also a necessity.
It may have been a long time coming, but it appears that machine-readable news’ time has come. With today’s emphasis on fast, automated and event-driven markets, the ability to tap events and apply them to computer-based models seems obvious. But until relatively recently, the idea of electronically capturing news–or text-based information–for use in automated processes has been the stuff of science fiction.
In today’s financial markets, trading firms face constant pressures in a fiercely competitive environment. Providing best execution and superlative customer service is fundamental to attracting order flow. Running trading operations efficiently is also an imperative, to minimise costs internally and to offer best value to customers. Despite the increase in recent years of automated and algorithmic trading, the human touch is as important as ever in financial trading. Traders bring a wealth of experience to the art of trading, even when it is driven by computer-generated indicators. Their experience and relationships are vital to seeking out liquidity and efficient execution.
