Automated Trading and the New Markets

New Automated Trading Systems (article)

New automated trading systems are changing both the face and the infrastructure within investment banks. Vendors and banks are now exposing more of their systems to programmatic trading opportunities as their e-commerce offerings mature. Over the next ten years, these changes will continue to evolve and create radical changes.

Over at, this article by Robin Sharp explores the reality of the new trading systems and the profound effects they’ll have on the banking infrastructure.

From the article:

“The history of automated trading can now be traced fairly clearly, and has involved the gradual removal of hands from the trading process.

(1) Hands-on Quotes - Prices are quoted over the phone-to-phone
(2) Indicative Prices - Prices are published but require manual confirmation
(3) Screen-based Trading - Prices can be executed on the screen
(4) Automated Trading – Prices can be published and executed by computer

Most importantly, the evolution of increased automation between counterparties (banks, vendors and clients) has now come to an end. The process of automation could become quicker and slicker, with more counterparties and more instruments, but no new degrees of automation can be added between counterparties. Automated trading can now be enabled across all the primary instruments, and it is anticipated that a lot of the derivative instruments will become automated too. The question is therefore, within banks, where will automated trading go next?”

About the Author

Matt Stephens is a senior architect, programmer and project leader based in Central London. He co-wrote Agile Development with ICONIX Process, Extreme Programming Refactored, and Use Case Driven Object Modeling with UML - Theory and Practice.