2009/03/23 17:42

TradeTech Q&A 준비 algorithmic trading

1. 한국의 buy and sell side 가 더 나은 트레이딩 기술을 요구하게 되는 요인은 무엇인가?
   (impetus from the Korean domestic buy and sell side to adopt more trading technology)
   Korea has quite long history for its electronised market. Korean stock market was electronised 30 years ago. Koscom was founded to do that, and deployed new market system successfully on last Monday. Also, Koscom developed STP-HUB 5 years ago which had FIX order network and support clearing and settlement. Now, almost all of Korean buy and sell sides are connected to Koscom. It has delivered new opportunities for Korean market players. They can react more quickly and they can be more flexible to the market fluctuation. Under the proud of what Koscom have worked for the Korean market, I can say that the development and progresses of information technologies is the strongest impetus for market players.
2. buy side 의 입장에서 FIX, DMA, 알고리즘 트레이딩, crossing network(다크풀)을 어떻게 이해하고 있나?

  Frankly speaking, their understandings for the such IT environments are quite low. Korea has just one domestic crossing network, and it's not much successful at the moment. I think it's only because buy side players do not know what it is, and they do not know what beneficial it has. Also algorithmic trading is same. I think the algorithmic trading and corssing network are on their early stage. For the FIX and DMA, buy sides are getting much familiar to use them.

3. 한국에서는 언제 전화/팩스 주문이 사라지게 될 것인가?

  Very soon. If there is someone who is still use phone or fax, Please think of that it's 21st century. They are losing their competitiveness.

4. 어떤 상품(asset class)이 가장 많이 유통되고 있는가? multi-asset 트레이딩으로 옮겨가고 있는지?

  Still, the main asset class is equities and equities linked derivatives. Korea has very liquid market for Kospi futures and options and we could have seen the astonishing progresses of listed warranties in years. Also, the FX market is getting popular from last year. But the commodity markets are still not liquid. We should go another long way to trade multi assets.

5. 한국의 파생상품 시장에서 electronic trading 의 사용 정도

  For the listed derivatives trading, it is 100% electronised. But for market making, even though there are some vendors and Koscom is one of them, I can say that it's not much electronised. Trading systems are not integrated from front traders and back office.

6. 앞으로 1년내에 어떤 분야가 가장 발전할 것 같은지?

  Algorithmic trading. It's a sort of blue ocean in Korea. Korean brokers do not use well designed algorithms yet. They are using just simple TWAP and VWAP.
7. 어떤 트레이딩 시스템을 고객들이 요구하고 있는가?
   what electronic trading tools are your clients demanding?
   For equities, they are demanding FIX connectivity and DMA. For derivatives or OTC options, they are demanding merely dynamic hedging and market making system.
8. 지난 1년간 고객들의 요구나 선호에 있어서 변화가 있었는지?
   how have these demands / preferences changed over the last 12 months?
   Traditionally my clients have demanded the "fast" system. They've focused the latency. but now, they are thinking that the speed can't give more competitiveness. They are looking for the competitiveness in their execution services for clients. It's FIX, DMA and algorithmic trading. And, for the prop desk, they are looking for some quantitative trading system. They want to trade arbitrage using volatility, and hedge dynamically.
9. 트레이딩 시스템 벤더들이 고객들에게 시스템을 제공할 때 어떤 점들이 어려운가?
   what challenges are they facing when implementing electronic trading tools with their customers?

    There is big gap of knowledge between traders and IT. Vendors should study the market more absolutely, but I hope customers try to study their IT environment.


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