Technologies Impacting the Equity Trading Desks - Quod at TradeTech Europe 2022
Data-driven intelligence and automation in Equity Trading
How do AI and ML facilitate better price discovery? How does automation change the role of a trader? What technologies improve the trading desks? And where investments should be made?
Quod Financial attended Trade Tech Equities in Paris. This year, experts in the equities community shared their insights on the technologies, such as machine learning and artificial intelligence, that have the biggest impact on Equity Trading Desks.
Quod Financial covers TradeTech Equities 2022
Themes and Insights
Technology at the Equity Trading Desks in 2022
Machine Learning can close the loop from TCA to EMS. Quod discusses how new developments in ML can assist with system configurations and real-time trading improvement.
We asked attendees:
- What technology solutions are most impacting the Trading Desk in 2022/2023?
- How is TCA improving and what is most influencing that improvement?
Our Views:
For the first time, we are able to see a feedback loop between TCA results and the pre-trade automated decisions, driven by the artificial intelligence and machine learning. Quod Financial demonstrates how the use of TCA and machine learning together, can change the way algos are interacting with the market, and how traders are trading. The use of AI/ML driven automated decisions, particularly in a feedback loop from TCA, is here to change the way that automation interacts with the trading desk.
AI / ML and Algos in Trading
Artificial Intelligence and Machine Learning have allowed the traders to focus on the exceptional trades that generate value for the business. Traders can use machine learning to augment their decisions, and the pre-trade automation to simplify their workflows.
However, before that, people need to think about improving the infrastructure, order management solutions and the data architecture. It is enabling the machine learning, that is the priority for many businesses at the moment.
We asked attendees:
- In what technologies do you believe investment should be made by Trading Desks?
- How has AI/ML benefited the trading desks?
- Has your organisation looked to implement automation?
Our Views:
At Quod Financial, automation is now fundamental to every part of the technology that we are developing. Whether it is pre- or post-trade, OMS or algos, we understand that there is no part of the O/EMS technology, that does not need to benefit from automation. For us, it is about the whole business focusing on bringing automated workflows, whether it is in the middle office or in trading.
Read our White Paper on the Future of Smart Order Routing and Automated Trading:
- Introduction
- Liquidity Fragmentation: An Evolving Challenge
- A Current Picture of Smart Order Routing
- The Case for Adaptive Trading Technologies
- Machine Learning & Smart Order Routing
- Conclusion
Driving innovation in Equities
Machine Learning and AI for Trading and Execution
WHY AI AND WHY NOW?
Interest in Artificial Intelligence (AI) is exploding and all businesses consider it a prime futurereshaping initiative. To understand AI we can first look at the context of Information Technology
(IT) history and evolution:
IT progress is written on a 10-year generational shift, driven by the Cambrian explosion of computational power. We are just coming to the end of The Mobile age (universal computing device), which superseded The Internet age (democratic connectivity) which followed The PC age (decentralised computing). Some of the current of AI-touted technologies have been in use for very long time, such as Expert systems (1970’s) or Recommendation engines (2000’s).