Latest Blog Posts

Applying Blockchain to Payments

Chris Skinner

Aug 23, 2016

I’ve blogged for over a week about blockchain based developments in Clearing & Settlement and Trade Finance, and will continue for another week talking about the developments in Payments and Digital Identity.  However, at this point, I should clarify that I use the term blockchain as an overall term to describe what is happening.  I often get critiqued for this, quite rightly, as blockchain is just a part of building a distributed ledger and what I’m really talking about here is Distributed Ledger Technology (DLT). read more

Dark Trading and MiFID II: What You Need to Know

Duncan Higgins, ITG

Aug 23, 2016

MiFID II implementation may significantly affect investors’ ability to source dark liquidity effectively. Broker crossing networks will disappear, and certain types of dark trading will be mostly restricted to midpoint. If triggered, the introduction of double volume caps will limit certain dark trading volumes per stock to 4% in a single dark pool and 8% across all dark pools. The double volume caps are likely to result in six-month dark trading suspensions for many stocks, increasing market complexity around trading suspended stocks and tracking the status of each stock. read more

Putting the Ex in IEX

Philip Pearson, ITG

Aug 19, 2016

IEX begins its exchange launch today, Aug. 19, taking the next step toward gaining meaningful market share from the likes of NYSE and NASDAQ. The transition from an ATS to an exchange takes place in phases over two weeks, concluding Sept. 2. This culminates a long application process that brought out both ardent critics and supporters. IEX has actually had a working lit order book for about 1.5 years, slowly growing its market share. Currently, its lit and dark books combine to be slightly below 2% of U. read more

True innovation?

Christian Voigt, Fidessa

Aug 15, 2016

The recent slew of exchange announcements introducing new dark trading facilities in response to MiFID II would appear to suggest that the regulation has triggered a whole raft of innovations. But is that what’s really happening here? Euronext tells us it is planning to introduce a new liquidity discovery service building on its existing iceberg orders. Looking at the detail, this appears fairly similar to the Volume Discovery Order announced shortly before by Deutsche Boerse. read more

Renewing Core Systems is Like Renovating the Subways

Chris Skinner

Aug 15, 2016

Someone recently equated banks and their systems and structures, to the underground in London.  It’s a lot of pipes, wires, cables and tunnels that were built in the Victorian times and are still operating today.  You have engineers on the tracks every night and day, trying to keep the systems running, whilst also trying to regularly overhaul to keep up.  Air conditioning, elevators, wheelchair access, wifi and more on the underground subways has made these ancient structures feel modern, but they’re not. read more

Ant Financial Core Banking Service in the Cloud

Chris Skinner

Aug 10, 2016

I got into an interesting debate with two good friends in Asia over the weekend.  I was sitting at home in the UK of course, but these days we are all connected globally in real-time so if you post something on Facebook or Twitter, you can soon find yourself in a global discussion.  This one was an interesting one as Zennon Kapron, a really good analyst and commentator based in China, posted an article about Alibaba’s Ant Financial. Ant Financial is the biggest FinTech Unicorn in the world with a valuation of $60 billion. read more

VWAP Can Be Misleading

Gabriel Kan & Tom Kingsley

Aug 05, 2016

According to a survey of buy side attendees at Asia Trader Forum 2016, 67% of respondents evaluate their execution performance by using benchmarks which are provided by either the portfolio managers (37%) or trading heads (30%). While VWAP is still the most commonly used benchmark in Asia, it has several well-studied shortcomings. First, interval VWAP does not account for order timing, in a sense that it cannot show the opportunity cost if the execution is started too early or too late. The benchmark calculation usually starts with the first execution and continues until the last fill. read more

Quant Funds Get Sentimental About Big Data

Ivy Schmerken, FlexTrade

Aug 04, 2016

Big Data Fed by Social Media Social media is creating a torrent of data every minute. But how much of this firehose is relevant to making better investment decisions? As hedge funds and asset managers eye an explosion in unstructured data from Twitter, Google searches, and other social content, many are subscribing to feeds that mine this data to detect events. Wall Street’s appetite for filtering and analyzing this social data has grown since it could be crucial to predicting the movement of stocks, currencies and derivatives. read more