Algorithmic trading
Expected increase
year-on-year
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Algorithm-based equity trading is expected to account for as much as 25% of overall trade volumes by 2008, compared with about 14% in 2004, according to a study by financial services technology consultancy Celent.
Algorithm usage by long-only funds is expected to increase at a compound annual growth rate of 28%, while hedge funds are expected to increase their usage by 11% and the sell side by 7%.
The growth in the use of algorithms by long-only funds is being driven by an imperative to flatter often unimpressive investment returns through better trading. Buy-side funds are expected to increase their use of algorithms so that they can reduce the amount of time their traders spend on simple trades, allowing...
