Electronic Trading Boom Spurs Spending on Advanced Trading Technology

The rapid growth in electronic execution of institutional equities trades will spur U.S. capital markets participants to spend $860 million on advanced trading technology this year, and spending will reach $1.3 billion by 2010, according to a TABB Group report. In 2006, more than half of institutional equities trades were executed through DMA, algorithms, programs or crossing networks. By 2008, 64 percent of institutional equities trades will be completed electronically, TABB Group predicts. Moreover, the increase in electronic trading, coupled with penny pricing in options and changes resulting from Reg NMS and MiFID, will cause daily market data volumes to soar, TABB says, from fewer than 4 billion messages today to 130 billion by 2010.