High frequency trading (HFT) platforms have low cost bases; are agile and dynamic. 1. HFT platforms have raised questions about the viability of big traditional exchanges in recent years because they have eaten away at their core profitability.
2. HFT creates unprecedented stiff competition in the trading of cash equities as well as other asset classes such as bonds and commodities including their derivatives.
3. Examining the drop: London stock exchange was trading 64% of UK equities at the end of 2010 compared with 75% in 2009.
4. Comparing it: Toronto stock exchange also had 64% of the Canadian market in 2010 compared to 95% in 2008.
5. Looking at the future: New York stock exchange (NYSE) and Nasdaq had 80% of trading volume around 2001, 10 years ago, while no exchange has more than 27% now. That means more than 70% of all share trading takes place outside the bounds of traditional exchanges in New York.
What does this mean? In the coming years, HFT platforms will account for even more of the market share, and traditional exchanges even less!
This exorbitant decline in market share of traditional stock exchanges hits profits and plays havoc with their cost bases and efficiency. It is the real backdrop to the LSE’s approach to buy TMX Group, owner of the Toronto stock exchange. Expect more mergers in the not too distant future.
We welcome your thoughts, observations and views.
All the best
Chairman and Founder: mi2g.net, ATCA, The Philanthropia, HQR, @G140
To connect directly with:
. DK Matai: http://twitter.com/DKMatai
. Open HQR: http://twitter.com/OpenHQR
. ATCA Open: http://twitter.com/ATCAOpen
. @G140: http://twitter.com/G140
. mi2g: http://twitter.com/intunit
— ATCA, The Philanthropia, mi2g, HQR, @G140 —
This is an “ATCA Open, Philanthropia and HQR Socratic Dialogue.”
The “ATCA Open” network on LinkedIn and Facebook is for professionals interested in ATCA’s original global aims, working with ATCA step-by-step across the world, or developing tools supporting ATCA’s objectives to build a better world.
The original ATCA — Asymmetric Threats Contingency Alliance — is a philanthropic expert initiative founded in 2001 to resolve complex global challenges through collective Socratic dialogue and joint executive action to build a wisdom based global economy. Adhering to the doctrine of non-violence, ATCA addresses asymmetric threats and social opportunities arising from climate chaos and the environment; radical poverty and microfinance; geo-politics and energy; organised crime & extremism; advanced technologies — bio, info, nano, robo & AI; demographic skews and resource shortages; pandemics; financial systems and systemic risk; as well as transhumanism and ethics. Present membership of the original ATCA network is by invitation only and has over 5,000 distinguished members from over 120 countries: including 1,000 Parliamentarians; 1,500 Chairmen and CEOs of corporations; 1,000 Heads of NGOs; 750 Directors at Academic Centres of Excellence; 500 Inventors and Original thinkers; as well as 250 Editors-in-Chief of major media.
The Philanthropia, founded in 2005, brings together over 1,000 leading individual and private philanthropists, family offices, foundations, private banks, non-governmental organisations and specialist advisors to address complex global challenges such as countering climate chaos, reducing radical poverty and developing global leadership for the younger generation through the appliance of science and technology, leveraging acumen and finance, as well as encouraging collaboration with a strong commitment to ethics. Philanthropia emphasises multi-faith spiritual values: introspection, healthy living and ecology. Philanthropia Targets: Countering climate chaos and carbon neutrality; Eliminating radical poverty — through micro-credit schemes, empowerment of women and more responsible capitalism; Leadership for the Younger Generation; and Corporate and social responsibility.
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