Discover the Advantages of Modern Trading Technologies

Discover the Advantages of Modern Trading Technologies

Open-outcry systems, well-known in the 1980s, are all but gone now, while some floor trading still occurs. Instead, innovation has changed the fundamental nature of trading. In contrast, there were once armies of employees manning trading desks. Investment banks have lessened their human capital resources, lowered headcounts, and substituted software and automated trading solutions for employees to achieve consistently tighter efficiency gains. In this article, we examine some of the newest trading floor technology.

Automation

More is being done to automate trading procedures and increase the presence of electronic trading venues thanks to legislation like MiFID II (Markets in Financial Instruments Directive II). Compared to manual operations, such automation is proven more cost-efficient and trustworthy in producing the necessary outcomes. Additionally, it more quickly and effectively records vital information, which helps to meet regulatory reporting obligations.

Cloud Technology

Making fast operations is much simpler, thanks to cloud technology. In real-time, traders may now seize opportunities faster. As a result, traders can spend less in trading commissions when using cloud-trading platforms. The course of the financial markets can swiftly alter in response to new developments. Cloud technologies make working remotely easier; check out IPC’s Unigy® Mobile Client if you’re considering a technology upgrade. 

Digitization

Traders are increasingly aiming to use digitization to acquire a competitive advantage in their bid and deal-making. This primarily aims at improving decision-making, enabling traders to dedicate more time to challenging activities like deal origination and data analysis. Alternative data, including geolocation information and satellite photography, deliver essential, actionable insights. Data analytics is also finding new applications thanks to visualization techniques like augmented reality and virtual reality simulations. Check out advanced trading tools like IPC IQ Max.

Circuit Breakers

Given the cutting-edge technology available today, the invention of circuit breakers may not appear revolutionary. Still, it was essential to the establishment of safe financial markets. Circuit breakers, sometimes known as “collars,” are a type of device used to stop panic selling by momentarily halting trading on a platform or securities when price volatility gets out of control.

Electronification

It converts unstructured communications, like speech and manual deals, into more organized electronic representations so that machines can read them more quickly. This encourages more effective workflow, increases liquidity, and enhances post-trade reporting. Learn the facts here about the latest trends in trading.

Natural Language Processing

The trading floor is chaotic even on today’s most technologically outfitted trading desks. Traditional speech recognition systems often need to accurately interpret the real meaning of such speech with extensive training. Because of this, traders might need to pay more attention to important data insights. NLP is versatile and flexible to specific industrial demands, fit to resolve needs ranging from universal to niche. Its adoption is a no-brainer with untold potential due to the benefits that will be evident.

Conclusion

Artificial intelligence (AI), natural language processing (NLP), and deep learning are driving a seismic shift across the industry, and digital trading has all but eliminated the physical trading floor. As a result, the human element of institutional trading floors appears to be on an unstoppable march toward extinction.

Most transactions may now be completed rapidly, as opposed to when most businesses were conducted by shouting into and out of telephones. Traders may react quickly to these abrupt swings since it leads the market to move quickly.