Algorithmic Trading: The Black Box Trading Market

2005 appears to be the year of the algorithm. Brokers are rabidly building, integrating, and pushing their algorithmic offerings to the buy side, and algorithms are promising to fundamentally alter the equity trading. Despite the buzz, widespread confusion exists around algorithmic trading. What is it? Is it all hype? How do we separate fact from fiction? In this piece the author answers these questions and provides: • Definitions and delineation between Algorithmic, Arbitrage/Strategy Trading, Program Trading and Smart Order Routing • Data on the current and projected use of quantitative trading solutions by asset managers, hedge funds, and institutional brokers • A discussion of what impact algorithmic trading will have on the broader trading landscape • Perspective on emerging trends and the future of algorithmic trading.