Trading Transforms

The evolution of the process of buying and selling financial assets has generated efficiencies, but also disruptions

As technological advances in Wall Street trading gain speed and acceptance in the marketplace, the implications are manifold.

First-moving prop traders and technology vendors thrive. Once-staid buy-and-hold firms actively recruit programmers and embrace cutting-edge technology. Theoretically at least, more efficient trading can lower companies' cost of capital and boost growth in the broader economy.

But the brave new world also has its downside.

Salient quotes from the full story include:

“It's the gunslinger problem: everybody wants to be the faster gun, and there's always some guy who's going to get faster than the next guy,” said Jerry Hanweck, chief executive officer of Hanweck Associates, which sells algorithmic trading software and other trading and risk-management products to investment firms. “So there's this push for speed and this push for being faster and the push for being able to get your orders in the market quicker."

“The challenge of trading is much greater, the complexity is greater,” said Arun Kaul, principal of Hillsdale Investment Management in Toronto. “We have redoubled our efforts to just simply put more time and more energy into how we trade.”

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