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The Trading Mesh

September 2012

Looking For Perfect in the Trading World

September 21, 2012 Comments (0)           

Stricter risk controls are necessary at all levels of the high-frequency trading cycle, according to the Federal Reserve Bank of Chicago this week. HFT firms aren’t employing risk controls endorsed by industry and regulatory bodies, the bank’s study found, and algorithms run amok more often than expected.
Kill switches that terminate trading at certain levels, as well as limits on order quantities within a certain period were among the risk controls endorsed in Chicago, as...

McDonald’s Transparency Offers Financial Industry Food for Thought

September 14, 2012 Comments (0)           

“Would you like 500 calories, er, fries with that?” Global fast food juggernaut McDonald’s will list the calorie values on its menus across the U.S. next week, giving customers the chance to evaluate their choices. The parallel between this fast food initiative and the financial services industry may seem unclear, but I’ll try to make it more transparent. That’s it, actually. Transparency. Transparency is a virtue valuable not only to fast food, but finance as well. What party doesn’t want to...

Restoring Profits and Confidence with Big Data

September 11, 2012 Comments (0)           

“Retail and commercial banks should be simple and they should be boring,” Lloyds Banking Group’s chief executive said last week. “The industry must change,” António Horta-Osório told the CBI Scotland annual dinner.
Tempting as it may be for the capital markets to laugh at such navel gazing four years after the financial crisis began, Horta-Osório’s words ring true in electronic trading as well. The market has been losing...

Electronic Trading Accidents Can Help Improve Big Data Management

September 6, 2012 Comments (0)           

More than a quarter of market participants find its current structure “very weak,” according to a recent TABB Group poll, which indicates that all-too-frequent computerized trading goofs are eroding market confidence. Last month’s Knight Capital tech tragedy killed almost 20 percentage points-worth of warm fuzzies.
That’s 26 percent of drivers behind the trading wheel feeling that the track is “very weak,” up from just 7 percent in June and 3 percent...

Securing The Future And The Bottom Line With Data Management

September 6, 2012 Comments (0)           

It’s increasingly expensive for big banks to maintain their size, especially while they face growing data management challenges, increased capital reserve requirements and regulatory surcharges. Conventional wisdom used to hold that a bigger bank could better spread its risk. With more assets under its control, a big bank can diversify to the point of almost absolute security. Sounds pretty safe, but eroding confidence in too-big-to-fail institutions has upended this model. Increasing public,...