Algo my way

Algorithmic trading is becoming increasingly important, not just in equities, but in foreign exchange and fixed income. However, in volatile markets with trading times trimmed to milliseconds and volumes mushrooming, how are traders able to monitor market and credit risk exposures? Clive Davidson investigates

Algorithmic trading is changing the way markets operate. Rather than a team of people waiting to execute orders or sitting around a Bloomberg machine in search of opportunities on a handful of exchanges, trades are now conducted at sub-second frequencies, while algorithms are programmed to spot tiny arbitrage opportunities across different trading venues and execute near-simultaneous trades in the blink of an eye. The wide use of algorithms in the cash equity market is thought to have