The TRADE 2018 Algo Survey - Long Only | Page 6

[ A L G O R I T H M I C T R A D I N G S U R V E Y ] and remain top priorities for long-only firms. Speed and lower latency also continues to grow in popularity, as does the ability to cus- tomise algos to fit specific trading strategies or portfolios. A large drop in the importance of anonymity over the past few years also indi- cates that long-only firms are now less concerned with masking their activity from other participants and are instead focusing on streamlin- ing the algo trading process while reducing costs as much as possible. Least surprising of all is the decline of internal crossing capabilities, which, in the context of MiFID II doing away with broker crossing networks (BCNs), was largely to be expected once the regulation came into force. Another trend that was largely the context of the new regulations and its importance is clearly being recognised as the scoring suggests, having increased for the past three years. However, the extent to which the impact of the double volume caps (DVCs) will affect the use of algos specifically for off-exchange trading remains to be seen. Faster, better, simpler Long-only firms have clearly put down a marker as to where their priorities lie when it comes to adopting and using algos, as can be seen in Figure 2, which shows some interesting new trends. Clearly there is increas- ing desire in the post-MiFID II landscape for algos that provide greater consistency of execution perfor- mance, improve trader performance and are, quite simply, easier to use. The three areas scored well with respondents to this question, particularly the ease of use factor, which accounted for 14.57% of response and has increased by over half since 2016’s survey. The importance of improving trader productivity and reducing market impact may have dropped year-on- year, but neither factor displayed a significant decrease Figure 4: Number of providers used (% of responses) Long only 2018 Long only 2017 Long only 2016 34.34 1-2 34 23.4 26.11 2-3 31.1 22.1 39.55 34.9 5+ 54.5 0 78 // TheTrade // Spring 2018 10 20 30 40 50 60