22 November 2017
visit www.aciworldwide.com

FX algo trading to take off - Greenwich Associates

03 April 2012  |  6729 views  |  0 Dealing Room

With foreign exchange evolving into a mainly electronic marketplace, the industry is poised to see massive growth in the use of algorithmic trading strategies, according to research house Greenwich Associates.

Last year electronic trading accounted for more than 60% of global FX volumes for the first time, says the Greenwich study, based on tracking of volumes at 1632 end-user corporate and institutional customers.

Despite the prevalence of e-trading, only eight per cent of global market participants use algorithmic trading strategies for foreign exchange, up from six per cent in 2010, leaving "little doubt that these strategies have yet to gain much traction market-wide".

However, there are signs of life in certain segments; with use of algo trading strategies among the market's biggest and most active traders increasing in 2011 to 16%, from 12% the previous year.

Algo strategies are now used by 12% of participants in the UK and 10% in the US. Hedge funds are also ahead of the curve, with 20% using algorithmic trading, up from just 14% the previous year.

Peter D'Amario, consultant, Greenwich Associates, says: "As FX evolves into a mainly electronic marketplace, competition is taking place in milliseconds as opposed to minutes or hours. In such an environment, algorithmic trading strategies will play a much bigger role for both investors and banks."

More generally, from 2010 to 2011 electronic trading volumes increased 47% in the Americas, 20% in Europe and 22% in Asia Pacific. As a result of those increases, the share of total foreign exchange trading volume executed electronically in the Americas increased to 60% in 2011 from 51% in 2010 and the share of overall volume executed electronically expanded to 62% from 58% in Europe.

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related blogs

Create a blog about this story (membership required)
visit www.atos.netvisit https://www.niceactimize.comvisit www.vasco.com

Top topics

Most viewed Most shared
Ripple boss predicts central bank adoption of blockchainRipple boss predicts central bank adoption...
19977 views comments | 31 tweets | 33 linkedin
AmEx partners Ripple and Santander for blockchain-enabled cross-border paymentsAmEx partners Ripple and Santander for blo...
11970 views comments | 15 tweets | 42 linkedin
UK cryptocurrency exchange startup launches debit card for spending bitcoinUK cryptocurrency exchange startup launche...
9698 views comments | 26 tweets | 38 linkedin
Barclays warns of unprecedented online fraud this ChristmasBarclays warns of unprecedented online fra...
9514 views comments | 16 tweets | 33 linkedin
ING brings data privacy to blockchain transactionsING brings data privacy to blockchain tran...
7040 views comments | 22 tweets | 35 linkedin

Featured job

Find your next job