Traders Want Alternative Sources of Liquidity
So, what are traders looking for the most in the current market structure?
The answer? Finding alternative methods to source liquidity was highlighted as the biggest priority, according to traders surveyed and documented in the 2017 WBR Digital & Equities Leaders Summit. Running a close second was the need for transparency in data analytics.
The report and confab results, shared with Traders Magazine, surveyed 100 Equity Traders based in North America. The research gave the greatest weighting to buy-side firms, including asset management firms, hedge funds and pension funds. Respondents to the survey were global Heads of Trading, global Heads of Equities, Lead Traders or others of an equal standing.
Seventy percent of respondents were from the US and 30% from Canada.
The report, “Maintaining Competitiveness”, is the official benchmark for the Equities Leaders Summit, which provides a deeper look into the mindsets of the heads of equities trading as traders look forward to 2018.
This year’s report builds upon the findings from last year’s report, with some stark differences in the year-over-year results, according to WBR. For example, the top priorities have shifted in the past year to finding alternative methods for sourcing liquidity (57%; up from 42%) and increased transparency based on data analytics (54%; up from 39%); in 2016, the top priorities were IT investment to streamline the trading desk (46%; down from 59%) and streamlining across asset classes (25%; down from 45%).
The report also looks at the impact of MiFID II and the priorities for tech investment in the coming year:
- The top three highest planned areas for technology spend in 2017/18 are market data terminals and feeds (67%), EMS (63%), and data analytics (79%).
- 58% of respondents believe they will have to change their current trading strategy in response to MiFID II.
- Nearly 70% of respondents will see an increase in the number of liquidity sources they are able to connect with as a result of MiFID II.
- 49% felt that market making will have the largest impact on job functionality.
Challenges include illiquidity and fragmentation across borders.
The biannual survey enables regulators to share information and observe trends.
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