THETRADETECH DAILY THE OFFICIAL NEWSPAPER OF TRADETECH 2022 Stuart
Lawrence : Automation of the trading desk
Head of UK equity trading at UBS Asset Management , Stuart Lawrence , speaks to the TRADETech Daily about the importance of automation and the ways in which it will provide benefits .
Why is streamlining end-to-end workflows using automation so important ? At UBS Asset Management the equity trading desk executes for all strategies . As with our peers , a decent percentage of the flow is small in notional value and / or ADV and there is little value-add a trader can provide to these orders . However , without automation , they must spend time dealing with this subset and this comes with the opportunity cost of them being unable to focus on trades for which they can provide more value . Automating the execution process for these order types reduces the ‘ white noise ’ on the desk which , in turn , improves efficiency and provides space for innovation . Traders are no longer just button pushers .
With auto-marking and booking , we can reach the point that an order can be sent , executed and booked without the trader needing to press a button . It should be noted that our desk still has oversight over the automated flow . automating this flow , we are able to make the process more efficient and free up the trading team .
We took the approach of not trying to build solutions to all order flows types immediately . We began with basic order flow and are now adding more nuanced order types to our automated routines . Eventually , most non-standard subsets should be able to be automated .
How can workflow automation improve oversight on the trading desk and beyond ? In terms of oversight , the main improvement is – through automation and via our algo wheel - removing broker bias . Traders naturally have broker preferences , often due to perceived performance as opposed to hard data and can also develop a ‘ muscle memory ’ for using the same counterparties . By removing this control for subsets of orders , we treat all brokers within the wheel , or whoever we use for automation , in a balanced manner . We can then drill down and analyse the performance data accurately . Often when you look at the actual data , the venue analysis , etc ., you find what you had thought was true is , in fact , not . Once datasets are collected , we can consider a promotion / relegation system to try new options . What I believe we ' ve found as an industry is , as in most endeavors , when you have numerous competitors , they will always try to innovate and outperform . The same happens with our sell-side brokers . So , if you give them the potential opportunity to join something such as the algo wheel , or part automation process , they ' re more likely to innovate . Secondly , through automation , we are pushing brokers to be the best that they can be .
Which panel at TradeTech 2022 are you most looking forward to ? ESG , as it is now one of the most
What issues do unstandardised order flow and order entry pose to the trading desk and how can automation alleviate these issues ? Unstandardised order flow is usually a small percentage of the overall business that we execute but is both timeconsuming and onerous for the desk . By
“ With auto-marking and booking , we can reach the point that an order can be sent , executed and booked without the trader needing to press a button .”
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