Currently the use of Automated/Black-Box trading in combination with the extreme speed in which orders are sent and executed (High Frequency Trading) are without a doubt the most important trends in the financial industry world-wide. The possibility to have direct access to the markets and to send burst orders in milliseconds, has been a fundamental factor in the exponential growth in the number of transactions that we have seen in recent years.
This has led to all those involved in the industry to rethink the role they will play to meet the needs that the buy side and the sell side will require in the coming years. The operations through “Black-Box Trading” are largely complementing traditional traders on order execution and market monitoring, given that they can detect arbitrage opportunities that would be impossible to perceive by humans given the speed and way in which these algorithms operate.
The financial intermediaries who do not provide their customers with: greater execution speed, transparency, security, support for the volume of messages required by High Frequency traders, technological and the operational infrastructure required for API, FIX, Routing and Direct Market Access (DMA), will be displaced in a very short time.