Live Blogging- TradeTech West Day One
Can a new relationship between the buy side and sell side lead to better service?
In a conference surrounded by economic instability and a slowly recovering confidence, Carol Penhale, Cutter Associates, kicked off TradeTech West by acknowledging that we, as a trading community, have come a long way since last year's conference. She quickly reminded attendees that we are no longer trying to figure out when rock bottom will hit, but instead addressed the challenges of capturing and communicating the data that is now available.
With this in mind, Mrs. Penhale introduced today's first panel, "The New Buy Side/Sell Side Relationship: Achieving a Better Service and Managing Counterparty Risk." The panel, consisting of four head traders from prominent buy side firms, directly tackled the importance of a strong and consistent relationship between buy side and sell side partners. As panelists debated on how to improve the relationships between both sides, they all agreed on that fact that we are currently seeing a transition from low touch orders to high touch orders. However, attendees were polled on what percentage of volume trading would be high touch, and over 40% answered 0-20%. Greg Treacy, Head of North American Sales, Neonet, closed the panel by re-iterating the fact that the more information one has, the more useful it will be. "The worst thing you could do as a broker is not be on the same page as your client before the relationship begins," Treacy said, "It is extremely important to build dialogue before things such as quality and cost."
Is Transparency Enough?
Today's second panel, "Finding Liquidity in a Fragmented Market and Assessing HFT's Impact on Liquidity," focused on the importance of transparency. Jeff Brown, Senior Vice President of Electronic Brokerage Services, Fidelity, opened the panel by assuring traders that IT is definitely becoming more challenging on a daily basis. He added that there are an ever increasing number of flash orders and liquidity issues which make it even more challenging to keep up on analytics, protection, and technology alike. To increase transparency, David Margulies, Director of Sales, Pragma, suggested that traders talk to their brokers and walk them through their investment strategies. However, Mr. Brown argued that too much transparency can definitely hurt the market, declaring that if people are given too much information about what is being traded, there could be leakage. Richard Johnson, Product Managers Group, Liquidnet weighed in on the debate by saying, "It will be too easy to connect the dots if you have all the information that people are trying to get, it would be a detriment to the buy side."
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