TY - JOUR T1 - Next-Generation Algorithmic Trading JF - Trading SP - 31 LP - 34 VL - 2007 IS - 1 AU - John Bates AU - Mark Palmer Y1 - 2007/03/20 UR - http://guides.pm-research.com/content/2007/1/31.abstract N2 - Today's hyper-competitive trading environment—and continually shifting landscape—means both buy- and sell-side firms need to adapt to the effects of change and act quickly to outwit their competition. Sell-side institutions are exploring ways to scale the talents of their traders and optimize services to their buy-side clients, while buy-side firms want to control their trading strategies and hide them from the competition. Algorithmic trading has played a significant part in helping today's firms achieve these objectives. As the markets continue to evolve, the evolution of the algorithmic landscape will cause firms to re-evaluate their views on information technology, trading techniques, trading strategy, asset-class mix, the relationship between buy- and sell-side—and the very skills of the people they employ. New technologies, such as Complex Event Processing, are empowering the next generation of algorithmic trading systems—and creating an 'arms race' in trading capabilities. Through 2007, innovative firms will continue to identify ways to get ahead of their competition. To do this, they will look to technology that enables the creation and deployment of customized algorithmic strategies (trading in multiple asset classes); the pre-flight testing those algorithms; and the use of algorithms for real time risk management. Algorithms are facilitating a fundamental change in the way the markets work—and creating an exciting era of opportunity for those who take an innovative approach to their trading practices. ER -