Adaptive trading key to navigating turbulent markets in 2009

8 January 2009

With unprecedented volatility and fragmentation forcing numerous changes in trading, Quod Financial, a global provider of multi- and cross-asset adaptive trading technology to financial institutions, predicts the following trends in 2009:

• More sophisticated smart order routing– North American firms will accelerate their use of European-developed smart order routing as liquidity shifts deeper into broker books and dark pools.

• Cutthroat competition, then consolidation – Adaptive smart order routing will be necessary to best capitalise on the fee incentives offered by different venues. Market share leaders will swallow up struggling venues in the second half of 2009.

• IT staff resource goes back to basics – Firms should leave core technology to capable providers and allow IT staff to customise trading systems that create competitive advantage and add business value, rather than build and rebuild solutions.

• Greater use of multi-asset trading as uncertainty continues across markets – Adaptive trading strategies will enable institutions to implement intelligent execution strategies to avoid volatility pitfalls, improve efficiency and maximise returns.

• Surge in buy-side front-office IT spending in 2009 - The buy-side will need intelligent liquidity and execution capabilities that are non-disruptive to existing investments and rapidly deployable.

“In the midst of crisis, there always exists opportunity. 2009 will provide smart financial institutions with a valuable opportunity to get ahead of the curve and adopt adaptive trading technology,” said Ali Pichvai, CEO, Quod Financial. “Using this approach, firms can make more informed trading decisions and remain competitive in the midst of tumultuous markets.”

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