TradeTech FX: “Automation needs to broaden its focus away from the point of trade execution”

A shift in the focus of automation up workflows, away from the point of trade execution, could reveal an improvement in multiples, a buy-side panelist has concluded.

Speaking at TradeTech FX, eFX head at British-American hedge fund BlueCrest Capital Management, Garrod Treverton, said automation is too focused on the point of trade execution, which takes anywhere from a few seconds to a few minutes and where limitations make innovation difficult.

“Regulations and codes of conduct are very restrictive of what retailers can do at this time. It’s basically a sequential trade if you get a trade unless you can’t,” Treverton said.

Instead, he argued that if the power of automation were turned upwards, the industry could uncover where a trade is coming from, how it could have been managed differently before it arrived, and how the order might relate to other business books.” Improvement of multiples”.

The relationship between traders and portfolio managers was another area where Treverton and colleague Vinay Trivedi, chief operating officer at MaxxTrader Systems, felt automation could be used to improve processes.

“Traders are on the coal front all the time. They understand liquidity, pricing and dynamics. For portfolio managers, FX is not their primary concern. You know it’s having an impact, but there needs to be more dialogue, like you’re seeing with fixed income, for example,” Treverton said.

“This is where technology can help close the gap,” added Trivedi.

switch skills

A common theme across the panels at TradeTech FX 2022 was the changing skills needed on the trading table in the face of greater levels of automation and electronification.

“Python has become a feature of desktops. Programmers and traders sit next to each other and that’s great because the guys developing the new processes can see the workflow and trader actions firsthand,” said Treverton.

“Taking the trader off the desk is the wrong idea. You cannot rule out a trader’s experience, especially in an emerging market currency. The industry should continuously work to bring innovation through the hybrid model that is here to stay,” added Trivedi.

bottlenecks

When asked what is slowing the pace of automation, Trivedi said certain firms have taken too long to let go of legacy systems and this has created a “bottleneck,” while he said some solution providers have stopped after a certain stage, such as post-development , stopped innovating and EMS or OMS.

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