Latest Blog Posts

And the Winner Is... Hybrid Trading!

Peter Fredriksson, Baymarkets

Nov 19, 2013
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With the structure of global OTC markets – particularly OTC derivatives -  going through some fundamental changes at the moment, it is perhaps not surprising that the main focus of many firms in the industry right now is on how to comply with all of the new regulations that impact their business. But just complying with rules and regulations and doing no more than that is never going to give a firm a competitive advantage. Those operating within the OTC landscape and evolving from a manual to a more automated trading environment need to increase efficiency, increase profitability and increase “stickiness” with their own clients, in order to stay ahead of the game. read more

Congratulations, you’ve (almost) reached Level 2

Christian Voigt, Fidessa

Nov 18, 2013

With the election of the European Parliament scheduled for May 2014, the Level 1 texts of MiFID II, MAD II and CSD Regulation are likely to be agreed before then. This means that next year will be all about drafting and agreeing the Level 2s for those laws. ESMA kicked things off at the end of last week, publishing the first discussion paper on the implementation of the Market Abuse Regulation. Market participants have until 27th January 2014 to respond, after which ESMA will prepare consultation papers on both its draft technical standards and its technical advice to the Commission. read more

Asia’s Equity Closing Auctions Develop into a Major Liquidity Event

Tom Kingsley & Gary Stone, Bloomberg Tradebook

Nov 15, 2013

You just cannot ignore closing auctions anymore. Asia’s market structure is changing, making the closing auction a significant liquidity event. The explosive growth in the region’s ETFs appears to be a contributing factor. These changing auction dynamics demand new technology and a change in trading conventions. New analytics, like Bloomberg Tradebook’s STAZ, are needed to provide traders with greater insights into closing auction activity to determine if execution strategies need to consider interacting with the closing volume. read more

Get with the programme

Mark Brennan, Fidessa

Nov 12, 2013

Electronic trading of swaps will soon be mandatory and industry participants need to get ready. Javelin kicked off the process on October 18th, filing its MAT (Made Available to Trade) submission with the CFTC for a broad range of interest rate swaps, including spot and forward starting swaps and variable notional swaps, with tenors ranging from 1 month to 51 years. Or, as one participant on an interest rate panel at last week’s FIA Expo in Chicago put it, “everything but the kitchen sink”. read more

Industry Survey, Momentum Builds for Cloud Services across Capital Markets

Louis Lovas

Nov 11, 2013

What is it about cloud computing that causes such a disturbance in the force?  The seduction of low-cost yet massive compute power creates overwhelming interest. Yet fears of a too-good-to-be-true offer create an emotional tug-of-war not for the faint hearted. Momentum is building fast within the trading and investment business to benefit from the $18B cloud computing industry.  In a recent OneMarketData survey, respondents overwhelmingly look to avail themselves of all that cloud offers. read more

The European Central Bank’s Asset Quality Review: Are Banks Doing Their Homework?

Markus Gujer, SunGard

Nov 05, 2013
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On the 23rd October 2013, the European Central Bank (ECB) launched its Asset Quality Review, looking at the assets on banks’ balance sheets and whether they have adequate liquidity levels ahead of a full stress testing exercise which will commence in November 2013, lasting 12 months.  The Asset Quality Review is a way of making banks do their homework ahead of the ECB taking responsibility for regulation, so that the banks take responsibility for their non-performing loans. What is encouraging to note is that the ECB’s latest news on the AQR does gives more clarity on how the process will be conducted, with the ECB sending teams into the banks, which will include outside consultants. read more

How to Optimize Trade Costs Through Algorithms

Jingle Liu and Kapil Phadnis, Bloomberg Tradebook

Nov 01, 2013

When executing buy-side trades, algorithm selection can have a significant impact on trade cost. Other factors, such as participation rate and limit price, can also affect performance. A recent study by Bloomberg Tradebook examined the role of participation rate and limit price relative to algorithm type. Algorithms were organized into four categories — Scheduled, Participation Rate, Dark and Implementation Shortfall. The data set used in the analysis included more than 270,000 buy-side orders that were executed over time and varied market conditions using more than 150,000 trading algorithms. read more

Time is of the essence...

Christian Voigt, Fidessa

Oct 30, 2013

Last weekend heralded the official end of summertime as the EU put its clocks back one hour. Since most electronic clocks are updated automatically many of us hardly notice the difference, but others may be forgiven for waking up somewhat confused as to what time it really is. I guess that must have occurred to the legislators in Brussels when discussing the possibility of imposing a requirement in MiFID II for trading firms and exchanges to synchronise their business clocks. Clearly, in a world where trading is driven more and more by high performance and low latency trading machines, getting your timestamps right is crucial. read more