Trading Beyond the Horizon
Available Now: 2010 Trading Beyond the Horizon
In 2010, financial markets participants will continue to expand their trading activities as liquidity increasingly becomes fragmented, seeking alpha in new markets, best execution in dark pools, arbitrage opportunities across the order book and by implementing high frequency and complex, multi-leg, cross asset class strategies.
The successful operations – whether they be the proprietary desks of traditional broker/dealers, specialist high frequency and algorithmic traders, or quantitative hedge funds – will leverage a trading infrastructure that combines high performance analytical, algorithmic and order routing platforms with the lowest latency access to multiple, geographically dispersed execution venues.
Multi-market trading – leveraging a fragmented market landscape – introduces new challenges, even for trading firms that have mastered the complexities of low-latency execution using approaches such as co-location and proximity. Those mechanisms, while still relevant, provide a less complete solution when trading across markets that are geographically dispersed.
New entrants into the market for connectivity and proximity services include organizations that are themselves market participants, such as sell-side firms offering sponsored access and DMA, and liquidity venues, which are now providing global order routing networks, in some cases channelling order flow to their competitors.
Those service providers join traditional players including telcos, hosting companies and value-added extranet vendors, who often bundle trading applications with connectivity.
The bottom line: For multi-market trading, optimization of long-haul and metro communications links, combined with smart use of co-location, is an imperative for achieving the lowest latency, and this requires an understanding of connectivity offerings at a deep, granular level.
This industry briefing explains the drivers for fragmentation and multi-market trading, the evolving landscape of market access, and explores connectivity approaches to minimize latency.
Tags: algo trading, ateam group, central proximity hosting, dark fiber, dark pool, data center, Electronic Trading, Fiber Networks, Low Latency, Low Latency Networks, low latency providers, ultra-low latency