Trade faster than a speeding bullet: INSTINET
Monday, 05 Mar 2007 12:35PM
The time it takes to execute a trade is about to get 10 times faster and up to 90 per cent cheaper thanks to a new trading system from INSTINET, one of the largest brokers in the electronics market.
Called INSTINET Chi-X, the product promises to set a new speed benchmark for trade executions, said Nick McDonald, the group’s global head of Asian equities at this year’s Trading Technology conference in Sydney.
The new technology, which allows traders to execute trades in microseconds, is just part of the industry’s natural evolution and need for speed.
“It used to take days, then hours, then minutes, then seconds, and milliseconds and now [with Chi-X], microseconds.”
McDonald said that the broking world is in the middle of a shake-up, particularly as consolidation between the major exchanges and the rise of alternative broking channels have created a new dynamic in the industry.
“INSTINET Chi-X will offer trading execution fees up to 90 per cent lower than what the Exchanges charge, with a technology that is up to 10 times faster and with 10 times greater trading capacity,” he said.
Driving the seachange is the contrast between the trading technologies used in the US, western Europe and Asia.
“INSTINET estimates costs of executing and clearing trades in European exchanges is about three times more expensive than similar trades in the USA and 50 per cent higher than in Japan,” said McDonald, continuing that it’s because most of the European platforms are sitting on legacy technologies that are not as efficient as the cutting edge platforms developed and used in the US.
The end goal is to provide better service to brokers across the globe. “Traders should welcome the competition…new technologies such as Chi-X will drive greater innovation and better prices in the sector,” he said.
Michelle Baltazar |
