With electronic trading now the default position at the vast majority of world exchanges, users have commented on the varying
performance of the different exchange platforms. FO Week's Annalie Grainger hosted a debate in London between representatives of some of the world's largest marketplaces to discuss the ability of their systems to deal with algorithmic trading, the role of technology as a revenue generator and other topical issues.
To what extent has the increase in algorithmic
trading affected exchange technology?
Gerhard Lessmann, member of the executive
board, Deutsche Börse Systems: Algorithmic trading has
basically had two affects on us: one is increasing quotation
volumes and the second is a request for low latency and
complete information from the customer side. In 2005, we had a
tenfold increase in quotation volumes at Eurex. I think we have
dealt with that successfully. Our expectation is that the
increase in quotation volumes will continue and so we are
preparing measures to deal with this and we are also
continuously working at getting latency further down.
Jim Krause, CIO, Chicago Mercantile
Exchange (CME): I would echo almost everything that Gerhard has
said. Not only do we see algorithmic trading in options, but we
also now see a lot in the Eurodollar marketplace - with all the
implied functionality we see, it is almost like options as you
have people coming in and mass quoting the Eurodollar curve and
all of the implied things. What's interesting for us is that
the transactions have grown but the futures and options still
maintain a 50/50 split during that peak minute because of
futures moving into the options. That amazed me because,
although I certainly expected the options to continue to do
that, the futures are doing it as well as more and more things
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