Trends in Electronic Trading

March 25, 2003

Abstract

Boston, MA, USA March 25, 2003

Celent Communications forecasts strong growth for electronic execution services, based upon increasing usage among institutions and continued market fragmentation.

In a new report entitled " ," Celent reviews the causes of current market turmoil in the trade execution marketplace, and profiles a new entrant in the market, Automated Trading Desk, which is attempting to utilize technology to improve execution services while profiting from economies of scale. The report ends with a set of conclusions that set out the market痴 likely development in the years to come.

Providing trade execution services is becoming an increasingly risky proposition. Deteriorating market conditions, decimalization, the advent of SuperMontage and DOT routing, and intense market competition have created an exceedingly difficult business environment for market-making firms and agency brokerages offering execution services to retail firms and institutions.

According to Fritz McCormick, Celent analyst and author of the report: "For investors attempting to get trades executed, this development means insufficient services and potentially poor execution. Retail brokerage firms, for example, looking to execute their order flows, must seek alternative venues or systems to their traditional base of market makers and agency brokers. Market makers have taken an especially considerable hit in recent years." A is available online.

of Celent Communications' Retail Securities & Investments, and Institutional Securities & Investments research services can download the report electronically by clicking on the icon to the left.  Non-members should contact info@celent.com for more information.

        

Send mail to info@celent.com with questions or comments about this Web site.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

 

Boston, MA, USA March 25, 2003

Return to report Abstract

 

EXECUTIVE SUMMARY 3
INTRODUCTION 4
MARKET OVERVIEW 6
  Declining Markets, Rising Volumes 6
  Decimalization 8
  Disintermediation 9
  Standards 10
  Fragmentation 12
  Rise of VWAP 14
  New Entrants 14
AUTOMATED TRADING DESK (ATD) 15
  History 15
  Main Business Operations 16
  Key ATD Features 17
  Clients' Testimony 18
  Evolving Marketplace 20
CONCLUSIONS 21

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