Thought Leadership

  • I was on the trading floor when the CBOE 250 Index contract was launched in 1988. It was an innovation at the time, and a collaborative effort between the futures and options industries. The futures traders went wild within their group; the options traders quietly assessed things and then traded amongst themselves. Within five months, trading was nonexistent.

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  • As the new year started, China turmoil and the activation of new circuit breakers triggered global market contagion. ITG uses key data points to analyse what happened, and provides a useful ‘Market Compass’ tool to help traders predict the broader effects of market conditions on Asian markets as they open.

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  • I recently spent a week in Australia meeting with fund managers of all sizes, asset consultants, research providers and industry groups. The meetings were to discuss the topics of unbundling of dealing commissions, commission sharing arrangements (CSAs), and how to value investment research. In five days I did over 25 meetings and spoke to well over 100 people on the topic. At some meetings there were 6 or 7 people from the same firm in the room. The change in attitude from my last visit in 2014 was huge: twelve months ago this topic elicited general interest, but no sense that this affected most firms directly. Now, Australian firms are moving into action …

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  • While traders and market structure “experts” spent much of their focus on evolving (disappearing) fixed income market liquidity and the potential impacts of MIFID II rules on existing business structures, 2015 also brought several significant changes to Canadian equity market structure. We witnessed the arrival of Aequitas; market wide debate around the routing of interlisted retail flow to U.S. markets; long-awaited changes to the TSX MOC facility; the introduction of an HFT friendly speed bump at Alpha; Nasdaq’s purchase of Chi-X Canada (expected to close in Q1 2016); new proposed best execution rules; the meteoric rise of inverted trading venue volumes; and the introduction of Platform Traded Funds (PTF) to name just a few.

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  • On January 12 last year, the TMX Group made significant changes to its Market on Close (MOC) facility. The revamped closing auction was implemented to address longstanding concerns of price protection and the inability to execute odd or mixed lot orders. This is a quick refresher on the changes that went into effect early last year.

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