Buy-side Perspectives Issue 14 | Page 14

Buy side cross asset derivatives traders debate status quo and how to evolve trading to the next level On the 9th October 2018, The Buy-side Trading Community (BTC) by K&K Global Consulting (K&KGC) widened its scope of the private, exclusive, invitation only Alpha Trader Forum (ATF) buy-side trading roundtable debates with its inaugural cross asset derivatives meeting in partnership with BNP Paribas, CME Group and Fidessa. 22 heads of derivatives trading from the largest global and European asset management firms were represented at the meeting in London. Anita Karppi, Managing Director, BTC by K&KGC said; “The buy-side heads of trading had flagged the need for derivatives traders to meet and discuss how to improve their processes for the last few years. The buy-side trading community are increasingly establishing more cross asset derivatives trading functions and it made sense for us to cater with our specialisation of bringing the buy-side community together to discuss how they could improve their processes at the derivatives dealing desk. Ultimately all of our activities are in the best interest of the end investor. The conversations at our first ATF cross asset derivatives meeting highlighted areas in need of optimisation and the only way to resolve such challenges is for intelligent people to meet and discuss. We have already had similar conversations for trading within cash equities, fixed income bonds and foreign exchange over the course of the last 10 years and I feel we have contributed to the evolution of the buy-side trading desks in these areas.” 14 Trading technologies Most European based asset management firms have invested in legacy OMS infrastructures which from an interoperability and cost perspective limits the range of other trading technologies that can be adopted to the trading desk. Several OMS vendors in the industry have or are undergoing takeovers by larger firms so it will be interesting to see how that will impact the development of the existing technologies. The choice of OMS brand has often been driven from a cash asset class perspective and rarely caters fully for the more complex requirements of the derivatives trading desk. The meeting highlighted the availability of derivatives centric trading technologies on the market and the buy-side firms need to evaluate if the workflow improvement from a best-of-breed solution is sufficient to cover the incremental savings on the trading desk. The derivatives trading desks are increasingly being catered for with new types of trading algorithms. This is an area of focus and still in development with such a wide range of instruments. The ATF participants also discussed the benefits of straight through processing (STP) with better real- time information flow between the clearing houses, brokers and buy side to optimise the use of capital and collateral. Winter 2018