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FastMatch Joins IPC’s FX Hub

Sep 29, 2016
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IPC, a leading global provider of secure, compliant communications and networking solutions for the financial markets community, and FastMatch, a leading financial technology company focusing on foreign exchange trading, today announced that FastMatch has joined the IPC FX Hub.

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nCino Brings Automated Decisioning To Financial Institutions

Sep 29, 2016
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nCino, the worldwide leader in cloud banking, has introduced Loan Auto Decision to its Bank Operating System, enabling financial institutions to automatically run loan requests against their existing, proven credit policies, rendering decisions and providing customers with funds more quickly and efficiently than ever before.

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NSFOCUS Announced The Launch Of NSFOCUS STAR Partner Programme

Sep 29, 2016
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NSFOCUS, a global provider of intelligent hybrid security solutions, announced today the launch of its global partner programme, the NSFOCUS STAR Partner Programme. The program encompasses partners at the regional and national levels including resellers, distributors, consulting partners, technology and solution providers, system integrators and managed security service providers. NSFOCUS is committed to providing win-win relationships that enables channel partners to develop new market opportunities through the STAR Partner Programme.

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Latest Blog Posts

Blockchain Is The Answer But Not In The Way You Think

Steve Grob, Fidessa

Sep 28, 2016
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Barely a week goes by without yet another announcement heralding a new blockchain initiative in capital markets. It almost seems that if you are the CIO of a major financial institution and you don’t have a blockchain project underway then you simply have nothing to talk about at dinner parties any more. But what is really going on is that these firms have finally figured out that their post-trade operations are woefully inefficient and represent an unacceptable burden in today’s economic environment. The key here is the difference between being effective and being efficient. Post-trade has to be effective otherwise everything breaks, but late nights, pizza and spreadsheets just aren’t the way anymore. But is blockchain the answer? I am not so sure. The central tenet of the blockchain argument is that it is a distributed ledger that everyone uses. And there’s your problem – unless everyone really is using it (and the same one at that) then we will still need those pesky central counterparties that cause all the friction in the first place. And yet post-trade can and must become more efficient, but there are quicker wins to be had. Take the repurposing of FIX for affirmation processing. This is simple, elegant and reuses existing industry infrastructure. So much so that it is now being piloted for research payments in transactional RPAs. Other good ‘blockchainy’ ideas such as smart contracts don’t actually need a distributed ledger to work either. More important is the idea that firms need to co-operate to reduce cost in non-differentiating areas of technology. You don’t need a distributed ledger to do that, just the will and determination to put aside competitive differences.
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Trading U.S. Opening Gap In Asia Hours

Gabriel Kan, Kei Gamo & Tom Kingsley, Bloomberg Tradebook

Sep 23, 2016
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Global economic slowdown, monetary policies and political unrest have introduced significant uncertainty to the equity market. The risk of holding a U.S. equity position overnight, measured by the difference between previous day’s closing price and market opening price, has increased by more than seven times in the last four years from 2.3bp in 2012 to 17.5bp in 2016 H1. The overnight gap risk is trending towards the 2008 financial crisis level at 28.1bp. The higher degree of interconnectivity and information flow among global equity markets contributes to the increase in the overnight gap risk. In particular, information revealed in the Asia equity markets appears to have a significant impact on the U.S. market open. For example, the intraday return of Nikkei-225 index (day open to day close) exhibits a high correlation to the overnight return of S&P 500 index (previous close to day open) at 43% in 2016 H1. The current inter-market correlation is the highest since the 2008 financial crisis, and has doubled in the last two years. For a strategic trader, the gap risk in the U.S. equity market represents opportunity to profit from the information revealed in Asia. The signal from Asia appears to be even stronger if the intraday move is larger. If Nikkei-225 index changes by more than 1% from open to close, its correlation to the S&P 500 index increases to 56%, compared to only a 25% increase if its intraday change is smaller than 1%. On the other hand, the ability to unload the risk during Asia hours becomes critical for a risk-averse trader. When important corporate or government events are going to happen, risk-averse traders could protect themselves from the price swing by off-loading their positions early. When the two types of traders meet, a potential matching of orders happens. There are two advantages for this type of matching. First, the matching would likely happen during Asia hours when information is revealed. This provides risk-averse traders the ability to hedge before U.S. market open, at the same time, and allows strategic traders to anticipate the gap direction. Second, the matching price is likely to be the previous day closing price. While the closing price is commonly used as the valuation benchmark, this would provide the maximum hedge for risk-averse traders as well as the maximum gap exposure for strategic traders. The matching results from Bloomberg Tradebook’s IWUD<GO> matching platform confirm this phenomenon. As an independent equity crossing platform, IWUD<GO> allows traders to show their interest of matching U.S. equity during Asia hours. Quantity and price are negotiable between buyers and sellers. From the U.S. equity matches in 2016 H1, 96% of them were completed at the previous closing price. On average, IWUD<GO> matches offset 90bp of gap risk, measured by the matching price vs. the next day opening price, which represents 15 times the average bid-ask spread of the underlying stocks at 6bp. This illustrates the value of an off-hours off-exchange crossing network.
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The Long And The Short Of It

Christian Voigt, Fidessa

Sep 22, 2016
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MiFID II requires trading venues to store personally identifiable information (each potentially 50 characters long) relating to the traders, investment managers and clients of the orders they receive. While it might be very convenient for surveillance to have order book data married up with personal data, this requirement is not only an additional burden to system load but also raises data privacy concerns. To mitigate these issues the industry is currently working towards an approach that allows trading platforms to rely on short codes submitted during trading, then receiving the mappings to the sensitive data via a separate link at the end of the day. Certainly the short code approach looks like the best way forward given the circumstances, but it forces market members to manage another long list of codes for each trading venue. Wouldn’t it be great if all the venues were to agree to use the same short code standard? Better still, and safer, if trading venues were only obliged to store the short codes while ESMA managed the mappings between those codes and client information. Wishful thinking, perhaps, given all the other mandatory MiFID II work going on and the short implementation timeline.
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Interview

MiFID II – the good, the bad and the regulatory

Jun 27, 2016
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ATMonitor talks with Christer Wennerberg, Head of Market Structure at Itiviti. Wennerberg discusses the main differences between equities and derivatives markets in regards to regulation, fragmentation and the implementation of MiFID II.

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MAR – What you need to know

Jun 22, 2016
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ATMonitor talks with Johannes Frey-Skött, Principle Software Engineer at Itiviti. Frey-Skött discusses the implementation and components of a complete MAR solution.

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Talking Trading with Itiviti

Jun 21, 2016
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ATMonitor talks with Chris Anderson, Senior Product Manager at Itiviti. Anderson discusses what sets Tbricks apart from other trading solutions, as well as current trends within the market and the challenges faced by clients.

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Survey

Execution Management Systems Survey

Trading Survey Now in its fourth year running, The TRADE magazine in conjunction with ATMonitor, is once again running its industry leading survey of Execution Management Systems for 2016. If you are trading electronically, we invite you to comment on your use of execution management systems, which features you consider important and how you rate their current capabilities. All submissions are reported in aggregated and anonymous format. Please rate your EMS vendors by completing the online questionnaire available here

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Research

Key To The Highway: The Changing Face Of High And Low Touch Execution

Fidessa

Sep 21, 2016
Key To The Highway: The Changing Face Of High And Low Touch Execution

This paper looks at the ways in which high and low touch trading are adapting to meet the realities of trading in capital markets today. It outlines why the either/or approach of low and high touch is simply too crude a reflection of the requirements of the buy-side today and argues that what is needed instead is a more nuanced, converged approach that leverages technology where it is common to both and yet still empowers the different activities required.

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Video showcase

Corvil working with RSJ

Corvil Watch Michal Sanak, CIO, RSJ Algorithmic Trading discuss working with Corvil. read more

Corvil working with Tradition

Corvil Watch Yann L'Huillier, CIO, Tradition and Alex Krovina, CTO, Tradition discuss working with Corvil. read more

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