Waters gathered leading industry experts for a webcast on October 11, 2012 to discuss what technological and operational initiatives firms are employing in their high-frequency trading strategies
Depending on which source you consult, high-frequency trading (HFT) operations account for as much as 60-65 percent of US equity volumes, illustrating the extent to which buy-side and sell-side firms use this "no-touch" strategy for much of their bread and butter. But the HFT market is not without its challenges and controversies, especially when it comes to what many perceive to be the introduction of systemic risk - heightened by the May 6, 2010 Flash Crash - and also the possibility of certain firms possessing an unfair advantage over their competitors due to technology and operational initiatives. But many believe that HFT has been given an unnecessarily bad rap and that its advantages far outweigh its drawbacks.
• What are the essential ingredients that need to be present for an HFT environment/trading operation to be effective?
• What technology and operational initiatives can buy-side and sell-side firms implement to get ahead of the HFT game?
• In an HFT environment, how do firms go about managing risk, especially deal-time or even pre-trade risk?
• What off-the-shelf technologies can IT departments at HFT firms harness to optimize their HFT environments?
• What are the advantages and disadvantages of opting to develop an in-house and therefore proprietary HFT trading environment?
• Does the "in-house" option make sense in such a tough operating environment, or does that depend on firms' individual attributes?
• What are the typical pitfalls that market participants need to consider when designing and implementing an HFT environment?
• Are we likely to see the introduction of regulations restricting latency to a certain level in the interest of promoting a more equitable HFT trading landscape?
- Tim Cox, Director, Global Execution Services, BANK OF AMERICA MERRILL LYNCH
- Mehmet Yanilmaz, Partner, MYRA TRADING
- Wolfgang Eholzer, Head of Trading System Design, EUREX
- Gil Tene, CTO and Co-Founder, AZUL SYSTEMS
- Moderator: Anthony Malakian, US Editor, WATERSTECHNOLOGY
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