Automated Trader, the world's leading journal of automated and algorithmic trading, has recently released its Algorithmic Trading Survey Report. The results clearly demonstrate that with firms now automating or planning to automate an ever increasing range of processes, the diversity of algorithmic models being used has exploded, with further rapid growth predicted. The use of algorithms for trade execution and trade signalling purposes has been widespread amongst buyside firms for some time; already over 80% report the use of systematic algorithms to trade certain instruments, while more than 60% make use of execution algos. However, the range of models now being used for a variety of other purposes elsewhere in the trade life cycle has also been growing rapidly, with:
- 46% using algorithms for risk and performance purposes
- 37% algorithmically managing their portfolios
- 30% using automated hedging algorithms
This trend is set to further gather pace over the next two to three years with buy side usage of systematic algos hitting 97%, and:
- 61% using risk and performance algos
- 55% taking advantage of algorithmic portfolio management
- 49% employing automated hedging algorithms
"The numbers further underpin the 2012 Survey's headline findings that indicate rapid growth in automated and algorithmic trading," said David Clayden, Head of Automated Trader's US Operations. "While this may be good news for brokers in terms of reduced client servicing costs, the buyside are clearly looking for more in return, with the number of buyside firms using broker performance models nearly doubling from 8% to 15%."
Further details can be found at the following link www.automatedtrader.net/digital_editions/1/automated-trader-algorithmic-trading-survey-report
