Mostly… fixed income and cross product eTrading

June 27, 2007

Algos and FIX in Europe

Filed under: Algos, etrading — holky @ 7:44 am

EFN says fund managers in Europe have been slow to embrace algorithmic trading (12% of trading volume at asset managers, doubling since last year) compared with their US counterparts; blaming poor technology, and saying that while MiFID may eventually encourage algorithmic trading, fund managers’ time and resources are focused on other projects … one recurring theme with higher priority being to implement FIX.   

With the industry still being at the nuts-and-bolts connectivity stage and hence without experience to fully trust electronic trading, limited uptake of algorithms, and another EFN article saying that dark pools of liquidity are relatively untapped by European Fund Managers, I can’t help thinking we still have an enormously long way to go to reach a post-MiFID vision of buyside connecting to multiple liquidity pools electronically and using algorithms to compare all in search of  best execution. 

But what’s the alternative?  An ALLQ type view of the different pricing available for a particular stock line, and a myriad of venue-specific manual order entry forms as part of their desktop?  With FIX implementation being top priority that’s clearly not the desired route.  But for those of us with a fixed income background, does that kind of setup ring any bells?  

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2 Comments »

  1. One big contributor to this problem is the fact that European markets charge a small amount for ever order CORRECTION in addition to orders themselves. Any stat arb or automated/algo system will be crushed by this onerous fee and thus the slow adoption. Until they fix that nothing will change.

    Comment by Mike — June 27, 2007 @ 3:39 pm

  2. […] and FIX Following on from previous post about algos and FIX in Europe, Finextra shows FPL take another step forward in standardising the […]

    Pingback by Algos and FIX « Mostly… — July 29, 2007 @ 3:57 pm


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