A panelist at one of the streams at the EMEA FIX Trading Conference on March 1 ventured the view that high-frequency trading (HFT) “would explode” if and when central clearing and settlement costs in Europe became more competitive. HFT can only operate successfully in markets that have high levels of liquidity. The markets must be supported by robust central clearing and settlement systems or service providers that are capable of handling high volumes of transactions at competitive fee levels. Transaction costs tend to be forgotten in the equation, but are highly relevant when financial institutions are executing very high numbers … Continue Reading →

At the London FIX Protocol EMEA Trading Conference on March 1, 2010, a panelist at the session entitled, “What’s next for high frequency trading?” made a profound observation in passing: “The days of screen- and eye-based trading may be reaching an end.” Regardless of the definitions, benefits, alleged market disruption, and segmentation of high frequency trading, trading now takes place at such a high speed that the traditional trader attributes of a quick eye and reactive brain are becoming redundant. Trading in the most liquid markets is pre-programmed in the sense that algorithms anticipate and react to a vast permutation … Continue Reading →

On February 1, 2011, CFTC Commissioner Bart Chilton told attendees of the American Public Gas Association Winter Conference, “I believe these trading programs need to be tested, either by the exchanges or by the regulators, before they go live and that they should be monitored in some way when they do go on line.” Now, bear in mind that this is the same regulatory body that lacks enough of a technology budget to store their market data through 2011. Now, Commissioner Chilton may not possess a complete grasp on reality, but he is not a lone wolf here. European regulators are proposing … Continue Reading →