At Solace, the shift to electronic trading has been at the core of our business in capital markets for many years. We’ve seen a variety of recurring use cases that are now mainstream, specifically for equities. For example:
- Buy-side firms engaging in high-frequency trading (HFT), either onsite or at a co-location facility.
- Sell-side firms offering smart order routing or internal order crossing to increase revenue or save on costs of order processing.
- Exchanges accelerating and enhancing their services to compete with ever more sources of liquidity.
- All kinds of capital markets participants improving how they handle real-time risk across trading systems, and/or automate middle-office settlement and record keeping.
Reg NMS and the Explosion in HFT
The path to these systems began with decimilization of equities in 2001 which dramatically increased electronic trading. Then in 2007, Reg NMS opened the door for many more competitors to supply liquidity, which created a n-way set of very-short lived arbitrage opportunities across trading venues.… Read the rest