BTIG, a global agency brokerage, has started offering high-touch trading services in Europe, predicting an increase in the value of traditional sales trading.
The firm has been working client orders in the UK for two weeks after receiving a licence from the Financial Services Authority and becoming a member of the London Stock Exchange. As well as agency-only sales trading, BTIG’s operations consist of a direct market access platform, prime brokerage services and an outsourced trading business.
Gary Hayes, CEO, BTIG, said there is a growing need for human intervention in today’s difficult trading conditions. “We think customers are getting tired of the low-touch algo trading model,” he told theTRADEnews.com. “When markets are this volatile, the algo trading models won’t provide as good an execution as a sales trader that has deep-seated relationships with institutions and hedge funds. Recruiting sales traders from the bulge bracket firms allows us to offer that traditional high-level service.”
A report published by research firm TABB Group in December, ‘US Institutional Equity Trading: Crisis, Crossing and Competition’, noted that high-touch trading in the US had grown to 44% of buy-side order flow in 2008 from 37% in 2007. TABB expects this upwards trend to continue for the next two years at least.
Hayes thinks that the unstable global markets will prompt Europe to follow suit before long. “Historically, Europe has always been a few years behind the US,” he said. “You can see this with liquidity fragmentation and the emergence of multilateral trading facilities in Europe this year – something that is already well established in the US.”