In the world of capital markets, the term low latency isn’t new. When we think about exactly who is benefiting from real-time updates, the sell-side investment banks, brokerage firms who are selling assets, securities or the latest derivative typically come to mind. We do not usually associate the advising institutions directly focused on buying - such as private equity firms or asset managers - with high speed trading. Traditionally, the buy-side has adopted a more cautious approach, focusing on how much return can be achieved  from the risk outlaid in the initial trade by going...

In 2012, as algorithmic trading continues to evolve, it is my view that we will start to witness more firms using their systems to trade equities not only from the US and Europe, but also from the Middle Eastern, Latin America and Asian markets. The latest announcement that Colt’s sister company KVH will be expanding its low-latency network to Sydney, adding a new data and co-location centre, is indicative of the expansion of trading, and the rise in transaction volumes, across the Asia – Pacific region. New entrants, such as the Multilateral Trading Facilities (MTFs), are...

The Rise of high frequency trading There is no doubt that 2011 has been the year of high frequency trading, the practise of using computers to analyse real time market information such as stock prices to implement proprietary trading activity in milliseconds. According to a recent study carried out by the Bank of England, high frequency trading’s share of the UK equity market has grown considerably since 2005 rising from a tiny portion of the UK equity market to now represent over 35 per cent. In the current economic climate, high frequency trading must seem attractive with its ability...