Cross-asset execution top of mind – THE TRADE POLL
a third of the industry believes the greatest increase in electronic trading
investment over the next 12 months will be in equities above any other asset class,
the latest The Trade Poll has found.
though equities is the most familiar instrument for buy-side traders – and the
one they already electronically trade the most – when asked in ‘which asset class do you expect to increase your
electronic trading investment the most?’ 31.31% of respondents chose the class.
Healey, senior analyst at research firm TABB Group, said she was surprised so many equities
desks felt they needed to increase their spend in equities trading technology.
She put the need down to a general desire for buy-side desks to be moving
towards cross-asset trading in the future, meaning their legacy equities
technology may not be compatible with the future of trading.
While equities was the leading asset class,
listed/over the counter (OTC) derivatives was a close second, gaining 30.30% of
the votes. The results reflect the widely-accepted expectation that an impending
move to trading more derivatives on exchange would lead to an increased
technology spend for the buy-side.
said she saw three main themes to technology purchasing in the future: a need
to build cross-asset platforms, a need for operational efficiencies within an
organisation and the fact that buy-side desks were shrinking in size.
are seeing an increase in buy-side spending as organisations look to trade
other asset classes. This could mean that they need to look at the whole
infrastructure rather than just equities. Some buy-side desks are having to
change their execution and order management systems to upgrade to platforms
that can trade across asset classes,” said Healey.
majority of participants considered foreign exchange to be the asset class
which needed the least technology investment, with less than one fifth of the votes
(18.18%) seeing it as the most likely area for increased technology spend.
However there was a mere 2.02% difference between FX and fixed income (20.20%)
as the top-of-mind asset class.
By Sophie Pallier
Register your view for the latest The TRADE poll.