For Immediate Release:
Contact:
Martin Rabkin, martinrabkinink
914-420-5739 / mrabkin@martinrabkinink.com
US Buy-Side Firms Will Route 87% of Futures Trading Through Electronic Channels in 2012 as Adoption Accelerates,TABB Says
Annual Benchmark Study Examines Buy-Side Trader Electronic Trading, Execution and Clearing Needs and Opportunities for Futures Commission Merchants (FCMs) in Post-MF Global Marketplace
NEW YORK and LONDON, March 6, 2012 – US buy-side firms are increasing their use of electronic trading tools for futures trading as their volumes continue to grow and they look for more efficient execution processes. Buy-side traders are embracing DMA and algorithmic-trading channels with volume routed through these channels accounting for the vast majority of trading,according to TABB Group in an annual benchmark researchstudy, “US Futures Trading 2012: Buy-Side Demands in an Evolving Marketplace.”
Buy-side traders are expanding their use of futures as an integral part of their investment strategies andTABB expects this momentum to carry into 2012, says Matt Simon, senior analyst at TABB and author of the research study. “Futures tradingis afocus point for large buy-side firms – traditional long-only asset managers, hedge funds and commodity trading advisors (CTAs) – that are seeing growing volumes and making the requisite investments into automated solutions to self-direct more of their order flow, trade more efficiently, minimize trading costs and execute more complex trading strategies.”
TABB Group spoke with 51 head traders at US asset managers and hedge funds during the fourth quarter of 2011, interviews that covered the impact of volatile markets, MF Global and FCM coverage; commission structures and rates; algorithmic providers and product needs; order allocation across the high- and low-touch trading channels; domestic and foreign trading venues; and liquidity demands.
“The futures markets are about to become a lot more competitive,” says Simon.Trading firms running futures-specific portfolios, including CTAs and hedge funds, he explains, will look to compete with more diversified institutions, refining their execution strategies to include automated trading tools that make execution practices more efficient. “As buy-side firms become more involved with futures, rising demand will prompt innovation, competition and a better environment for the brokerage industry.”
The 43-page study with 46 exhibits is available for download by TABB Group Research Derivatives Alliance clients and pre-qualified media at https://www.tabbgroup.com/Login.aspx. For an executive summary or to purchase the report, visit http://www.tabbgroup.com or write to info@tabbgroup.com.
About TABB Group
TABB Group is the financial industry’s only strategic advisory and research firm focused solely on capital markets, based on the proven interview-based research methodology of “first-person knowledge” developed by founder Larry Tabb. For more information, visit www.tabbgroup.com. In January 2010, TABB launched TabbFORUM, the online capital markets community covering opinions and analyses on current industry issues.
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