Voice Trading in Derivatives Is Not Dead: Long Live the Squawk Box!
It has been hypothesized that this could lead to a sharp decline in voice trading on many trading floors. On the contrary, the role of voice communications will continue to play a significant part in the trade lifecycle long after the reforms have taken place. If the trading of OTC derivatives is moved to new swap execution facilities, traders will still need to rely on voice solutions for sharing information and collaboration between traders and other experts within their organizations.
As electronic trading increases, whether it is across the derivatives or the bond market, there is still a tremendous amount of voice traffic that takes places even if the trades are ultimately processed electronically. By nature, derivatives trading is very complex. These high-monetary value trades demand a certain amount of voice interaction from multiple parties in order to come to a decision on an execution process.
A trading floor communication system is designed to operate as a finely tuned machine. There is an extensive array of required capabilities, ranging from voice facilities such as intercom and archival systems, to integration with the PC applications traders use, such as CRM, OMS, and market data applications. More and more, integration with other systems and applications using industry and open standards is critical to allowing traders to work efficiently and maximize their productivity.