From selecting FX algorithms, to evaluating liquidity providers, to identifying hidden costs, there is an emphasis on what the data is telling people, said multiple speakers at the virtual event. In addition, recent changes to the FX Global Code of Conduct, could provide additional market transparency for the buy side related to algorithmic trading and TCA.
As a provider of technology to the FX market, our signing of the Code reflects our commitment to support the industry’s move to become increasingly open, fair, and compliant with global standards.
We covered topics such as retail order routing and the debate over payment for order flow (PFOF). We examined the resurgence in alternative trading systems (ATSs), the rise of outsourced trading desks for the buy side, and efforts to regulate fixed-income trading platforms as registered venues.
Despite past attempts to usher in 24-hour trading in U.S. equities, a major catalyst behind the current momentum has been the round-the-clock trading occurring in cryptocurrencies which has raised expectations for retail investors. The rise of new electronic trading venues could test these assumptions, though issues such as liquidity and settlement time frames may need to be addressed first.
Dark pools catering to institutions have evolved with innovative methods of matching orders and faster matching engines to avoid moving the price after the trade. It’s also a sign of the intense competition brewing between off-exchange venues seeking to sign up brokers and institutions.
With the demand for increased efficiency and fee pressure from low-cost passive index strategies, in recent years, outsourced trading desks have gained traction with small and mid-sized asset managers. Among the benefits are the economies-of-scale that can be achieved because the capability is set up to act as an inhouse execution desk for multiple buy sides.
If PFOF is potentially curtailed or prohibited, it could impact retail investors that have benefited from commission-free trading as well as the wholesale market-maker model of matching retail orders through internalization.
Despite the boom in ESG investments, ESG metrics are not necessarily consistent across data suppliers and providers may calculate the metrics differently, according to recent industry webinars.
Will the trading desk of the future hook into online marketplaces that trade fractionalized shares of real estate, or non-fungible tokens (NFTs) based on art, sports or music?
By Ivy Schmerken Senior buy-side traders offered differing views on the definition of high-touch and low-touch trading in foreign exchange (FX) at a roundtable in May, shedding light on efforts to rank their brokers and incorporate data analytics into their decisions. Discussing their usage of FX electronic trading protocols and algorithms for “chunkier trades,” buy-side …