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TradeTech 2013: Why so serious?

In an era that stubbornly continues to define itself by financial unrest, a quick look at the tagline for the upcoming TradeTech conference in London tells you everything you need to know about the state of trading today. The fact that TradeTech bears the theme: ‘Serious Traders. Serious Technology. Serious Times.’ speaks volumes about the mood of the industry, but what does it tell us about which topics are likely to dominate the serious business of the event itself?

 

Serious Trading

There’s no doubt that some very serious trading is taking place. Indeed, only recently, the Dow Jones industrial average closed at an all time-high of 14,673 – only a week after the previous record had been established, so it’s clear there is something going on. Perhaps the increased prevalence of private trading platforms such as dark pools, and the perceived safety they offer, could be one of the reasons for this surge. The fact that fiercely competitive rivals, NYSE and Nasdaq OMX, are joining forces and lobbying for curbs on such platforms is a good indicator of how seriously they are taking this threat – at threat that by some peoples reckoning attracts as much as 40% of all trading volume on some days.

 

Serious Technology

So what about serious technology? In the world of low latency trading, several approaches, each appealing to different interpretations of ‘low’ in low latency, are cranking up the performance. In the world of custom built Java applications, a new breed of high performance virtual machines promise to overcome some traditional Java drawbacks and offer guaranteed response times. For advocates of Complex Event Processing (CEP) platforms, announcements will soon show that custom compilers are being incorporated to, for the first time, achieve performance levels that are equivalent to custom built C and actually better than Java. And for the ultra high-end of the market, custom hardware promises to pack more into a single FPGA meaning increases in parallel processing and more complex algorithms.

 

Serious Times

Clearly, these are serious times indeed for anyone trading European instruments or those in Europe trading anything at all if the financial transaction tax is any kind of barometer. The tax, that applies to trades where at least one trading party is in the FTT zone or the instrument’s underlying is issued in the zone, is being hailed by supporters as means to compensate society for the financial burden of the crisis. However, if I frame capital markets in the context of my own personal interest, and I wanted my portfolio of ISAs, pensions and such to have exposure to say the auto industry, will I gravitate to Ford over Fiat? Maybe. And will my small time, main street world outlook play-out at an institutional level? If recent average daily volumes in Italian domiciled stocks - that fell from €4.5Bn in February to €2.8Bn in March - are anything to go by it just might.

Either way, it’s clear that there will be plenty of serious discussion taking place at TradeTech 2013, and I’m sure that we’ll see a hive of interest and activity as a result of these and other topics. If you’d like to join the discussion, why not visit us at the show? We’ll be at booth 45 in London on 17-18th April and I look forward to seeing you there!

 

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