Saying no to algos
A number of banks have launched algorithmic trading systems for foreign exchange, intended to provide more efficient execution for clients. But some question whether algorithmic models are actually needed in the highly liquid foreign exchange market. By John Ferry
Algorithmic trading has come in for plenty of criticism from US politicians, with many blaming the practice for the dramatic flash crash on May 6, which saw the Dow Jones Industrial Average drop by nearly 1,000 points before rebounding. But even though it has come under the microscope in the equity market, this hasn’t stopped banks from looking to extend their algorithmic trading services to other asset classes – specifically, foreign exchange.
A number of forex platforms have now been launched
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