Professional high frequency trading firms currently account for 25% of futures volume - a figure that will reach 40% in 2015.
Boston, MA, May 3, 2010 – A new report from Aite Group examines the presence of high frequency trading in the global futures markets. The report considers the impact of regulation on the future of high frequency trading in the futures market, and categorizes automated-trading players in the space.
High frequency trading has been an important part of the futures market since the advent of electronic trading. Today, its role is growing, as technologies improve at exchanges and traders that had been active in other asset classes expand into the futures market. Based solely on the activity of professional high frequency trading firms, high frequency trading currently accounts for 25% of futures trading volume. Aite Group anticipates that this figure will reach 40% in 2015.
"The futures market will continue to be driven by model-based electronic execution and low latency liquidity provision, while exchanges continue to upgrade their trading platforms and build out their data centers," says Paul Zubulake, senior analyst with Aite Group and author of this report. "New entrants to the futures exchange landscape are expected, but will need to offer something new, given that 'copycat' markets have failed to bring liquidity in the past. Providing margin savings to end users of futures is the only way to gain significant market share."
Exchanges profiled in this report include CME Group, Eurex, ICE, and NYSE Euronext. Automated trading incubators Thesys Technologies, Kyte Group, and Trading Cross Connects are also profiled.
This 35-page Impact Note contains 13 figures and five tables. Clients of Aite Group's Institutional Securities & Investments service can download the report.