Use of Futures Markets Algorithms with Greater Sophistication Rapidly Shifting into High Gear, Says TABB Group

New Research Forecasts US Buy-Side Futures Volume Executed by Firms Using Algos at 96% CAGR, 2011-2015

NEW YORK & LONDON--()--As futures commission merchants (FCMs) continue to build out their electronic offerings for hedge funds and long-only asset managers in the U.S., TABB Group expects algorithmic trading in futures markets to continue expanding faster over the next two years, with a 96% compound annual growth rate (CAGR) from 2011 to 2015.

According to a new research report published by TABB, “Algos in Futures Markets: Shifting into High Gear,” written by senior analyst Matt Simon, this is occurring as institutional buy-side firms are shifting from traditional voice-based or direct market access (DMA) order-execution methods to algorithms with greater levels of sophistication.

Buy-side traders are beginning to realize that a simple algo is not sufficient for all order types. In order to achieve improved execution, they are evaluating the range of automated tools provided by the leading FCMs and vendors. These client demands are also providing revenue opportunities for brokers, technology providers and the exchanges that must support algorithmic trading.

“For buy-side firms to stay competitive,” says Simon, “rather than relying on strategies that their head traders do not always understand or find difficult to use, they’re seeking more automated trading capabilities, leading to the use of this new wave of more sophisticated order types.”

The 15-page report with 7 exhibits is available for download by TABB Group Research Alliance Derivatives clients and pre-qualified media at http://www.tabbgroup.com/Login.aspx. For a copy of the Executive Summary or more information, visit www.tabbgroup.com. To purchase the report, write to info@tabbgroup.com.

About TABB Group

With offices in New York and London, TABB is the only research and consulting firm focused exclusively on capital markets, based on the interview-based, “first-person knowledge’ research methodology developed by Larry Tabb. For more information, visit www.tabbgroup.com. In 2010, TABB launched TabbFORUM, the online capital markets community for peer-to-peer opinion and analysis covering current industry issues, tracked daily by more than 18,000 professionals.

Contacts

martinrabkinink
Martin Rabkin, 914-420-5739
mrabkin@martinrabkinink.com

Release Summary

Use of Futures Markets Algorithms with Greater Sophistication Rapidly Shifting into High Gear, Says TABB Group Research

Sharing

Contacts

martinrabkinink
Martin Rabkin, 914-420-5739
mrabkin@martinrabkinink.com