Investment on high-speed, advanced trading infrastructure value chain across asset classes will rise to USD 1.3 billion by 2010, says TABB Group

Investment on high-speed, advanced trading infrastructure value chain across asset classes will rise to USD 1.3 billion by 2010, says TABB Group

Tue, 17/04/2007 - 06:58

According to Jeromee Johnson, senior research analyst at TABB Group, components in the high-speed advanced trading infrastructure value chain will become more critical to trading success, which means 'these technologies must get better and faster.'

TABB Group has released its newest research report, 'Trading at Light Speed: Analyzing Low-Latency Infrastructure'. According to the report, in 2006, over half of institutional equities trades in the US were executed through direct market access (DMA), algorithms, programs or crossing networks and with steady growth in every electronic execution channel that percentage will increase to 64% by 2008.

While the bulk of technology investment has been and continues to be made in the equities sector, the entire industry has been spending steadily for years on advanced trading technology. TABB Group forecasts that total US capital market spending on advanced trading technology is expected to total USD 860 million this year, reaching USD 1.3 billion by 2010.

Factor in the effects of Regulation NMS, penny option pricing and MiFID, in just the equity and options asset classes alone across the global exchanges, the volume of market data messages will soar from under 4 billion messages per day in 2006 to nearly 130 billion per day by 2010, an increase of nearly 140% CAGR.

As a result, buy- and sell-side trading firms are being forced to change the way they deal with these exploding market data volumes and processing requirements.


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