For almost 25 years, SLIB has been a reliable partner to the financial industry, in step with the changes in the European securities landscape, by offering its customers innovative software solutions to streamline their securities processing and improve their performance, whilst mitigating their risks.Visit Vendor Page
- 04 June 2013
- Enterprise Collateral Management Conference 2013
- 05 June 2013
- 4th Annual Stress Testing, Scenario Analysis and Economic Capital
- 24 June 2013
- 5th Annual Trade Surveillance and AML Conference
- 10 July 2013
- TradeTech Japan 2013
Whilst my breath is still warm
Published on 06 Jul 2012
Posted by: Steve Grob,Director of Group Strategy,Fidessa
This prompted me to ask a friend about how all this worked in the good old days of manual markets and traditional market makers. In response to this question, he paused for thought and then replied that, in those days, your quote was valid “whilst your breath was still warm.” Basically, this was just a poetic way of saying that it all depended upon a bunch of factors – how fast markets were moving, the instrument in question, the client, and even the different nature of individual trading floors and exchanges. Seems like the regulators might struggle, then, to impose an absolute time frame for quote validity in today’s world as any level is destined to be wrong in most cases, most of the time. If they are determined to impose absolute limits, then why not do it the other way round, i.e. say that HFTers can pull their quotes just as often as they like but there is a certain minimum time period before they can resubmit a quote? This idea was put to me the other day and, whilst it sounds like a subtle change, it would seem to provide a fair and equitable solution to the problems of both the HFTers (namely having to trade on a bad or stale quote) and the trading community at large (noise and clogged data pipes).
Irrespective of the merits of this approach, solutions that are fair and equitable on all market participants should be the mantra of the regulators. This means divorcing themselves from the politicians and accepting that perhaps the best they can ever hope to achieve is a solution that leaves everyone equally unhappy.
0 comments Post Comment