It has memberships to 115 stock exchanges in 36 countries and is the largest secondary cash execution house in the world. Its research covers 3300 companies worldwide – about 85% of the world’s market capitalisation – across 46 different markets.
John Wall, joint global head of equities, says skimping on an equity trading business is costly: it requires high-quality delivery across trading, product development and structuring, technology and risk management, and research and analysis. It demands a broad client base and the ability to commit capital. “Without this balance, it’s hard to be competitive over the medium term, even though in the short run, in a niche product, you can appear competitive,” says Mr Wall.
The technology commitment becomes ever more critical, he says. “Technology empowers our traders more and more every year. It’s extraordinary to see how, by building systems with capacity, flexibility and backed by powerful mathematical models, the volume that trading floors can handle has grown many times over; the products become more complex while the number of traders stays quite stable.”
Scale is not the only important factor, either. “There are an enormous number of areas in which a human trader is incapable of competing with a machine, be it calculating an exotic derivative price or responding in milliseconds to market movements. Seeing our latest generation algorithmic trading systems come to fruition has been fascinating. We continue to find more situations in which automated trading can be effective both for client execution and managing risk.”
