Reforms could force OTC markets to embrace trading algorithms

Algos go OTC

Tim Carrington

Talking up the use of trading algorithms in over-the-counter derivatives markets might seem like a classic case of dealers trying to run before they can walk. Despite a gradual shift towards electronic trading, the vast majority of OTC trades are still executed in the same way they always have been – over the phone – which doesn’t offer a lot of scope for the application of algorithms. Regulation, however, is set to change that, by forcing the OTC world to use structures and