Six out of seven buy-side traders from the world’s major market centres agree that they add more value now than they did three years ago, according to a global study called ‘Buy-side Voice: The Road Ahead’, undertaken by Liquidnet and Greenwich Associates. One hundred buy-side traders from the US, Canada, Europe and Asia responded.
The US leads in electronic trading adoption with penetration at 96 percent, while Canada and Asia lag, the study found. 44 percent of all respondents said they have three or more electronic trading systems on their desk. 63 percent of respondents based in the US indicated that they have three or more systems, and 96 percent have at least one system. Canada and Asia trailed in this category with 33 percent and 50 percent, respectively, indicating that they have only one system.
92 percent of the respondents said that the number of electronic trading systems on their desks would either increase or stay the same. Asia-based traders, with the fewest systems on their desks, revealed high growth expectations vis-a-vis electronic trading, with 88 percent indicating an anticipated increase. European-based traders expect more of an increase than UK-based traders in the number of electronic trading systems, with 71 percent and 50 percent, respectively, predicting an increase.
“As our study confirms, the role of the buy-side trader has become increasingly influential across the globe,” says Seth Merrin, CEO, Liquidnet. “Our study uncovered some significant geographic differences in opinion on issues like exchange consolidation and electronic trading adoption,” he adds. In the UK, only 37 percent of respondents agree or strongly agree that there will be global consolidation of market centres, while 79 percent of US-based respondents agree or strongly agree. 67 percent of European traders and 62 percent of the aggregate respondents agree or strongly agree that there will be global consolidation of market centres.
“The advent of an increasingly sophisticated array of trading tools, in conjunction with a growing focus on best execution, is making the buy-side traders’ job more challenging, fulfilling and essential,” says John Feng, a consultant at Greenwich Associates. In Europe, traders selected the increasing importance of the trading desk as the change they like the most. The aggregate group’s second favourite change was ‘more choice in terms of trading strategies and venues’.