[ A L G O R I T H M I C
T R A D I N G
S U R V E Y ]
and remain top priorities for
long-only firms. Speed and lower
latency also continues to grow in
popularity, as does the ability to cus-
tomise algos to fit specific trading
strategies or portfolios. A large drop
in the importance of anonymity
over the past few years also indi-
cates that long-only firms are now
less concerned with masking their
activity from other participants and
are instead focusing on streamlin-
ing the algo trading process while
reducing costs as much as possible.
Least surprising of all is the decline
of internal crossing capabilities,
which, in the context of MiFID II
doing away with broker crossing
networks (BCNs), was largely to be
expected once the regulation came
into force.
Another trend that was largely
the context of the new regulations and its importance
is clearly being recognised as the scoring suggests,
having increased for the past three years. However,
the extent to which the impact of the double volume
caps (DVCs) will affect the use of algos specifically for
off-exchange trading remains to be seen.
Faster, better, simpler
Long-only firms have clearly put down a marker as to
where their priorities lie when it comes to adopting and
using algos, as can be seen in Figure 2, which shows
some interesting new trends. Clearly there is increas-
ing desire in the post-MiFID II landscape for algos
that provide greater consistency of execution perfor-
mance, improve trader performance and are, quite
simply, easier to use. The three areas scored well with
respondents to this question, particularly the ease of use
factor, which accounted for 14.57% of response and has
increased by over half since 2016’s survey.
The importance of improving trader productivity and
reducing market impact may have dropped year-on-
year, but neither factor displayed a significant decrease
Figure 4: Number of providers used (% of responses)
Long only 2018
Long only 2017
Long only 2016
34.34
1-2
34
23.4
26.11
2-3
31.1
22.1
39.55
34.9
5+
54.5
0
78 // TheTrade // Spring 2018
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