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Buy Side Wants One-Stop Shop for Trading Needs

This is Part Three of a Four Part Series Sponsored by Thomson Reuters

Traders Magazine Online News, August 15, 2018

John D'Antona Jr.

So, what does the buy-side trader want when it comes to multi-asset trading?

It goes without saying that he or she wants the best price, fill size and minimal adverse selection and market disruption. But there’s something else…

What is it?

Help from his or her vendors. Without these critical providers of essential services, the buy-side trader leaves much to chance which has given rise to the latest trend of partnership between the technology providers and institutional trader. Think of it as two great tastes that go great together – like chocolate and peanut butter, peas and carrots, or movies and popcorn. And the fewer vendors, the better. Or better still, one vendor who can accommodate other vendor partners on their platform.

Michael Chin, Managing Director and Global Co-Head of Trading at Thomson Reuters, told Traders Magazine that given the rise of multi-asset trading and desks and the dismantling of siloed trading, the buy side is actively searching for an integration of trading systems and services on a single platform. Given shrinking buy-side budgets and the need for efficiency, having a single provider supporting multiple applications on a desktop is crucial. After all, screen real estate is precious.

Michael Chin

“What we’ve seen and heard through our extensive discussions with the buy side and sell side is the need to integrate fixed-income trading capability alongside what they're doing with equities, futures, options, and foreign exchange,” Chin said. “The one message that we got loud and clear from discussions with our buy side clients is, ‘we would much prefer to go to a single vendor that provides multiple services and reduces the complexity in managing multiple sub-vendor relationships as opposed to multiple vendors where they don't get the benefit of an integrated solution.”

Chin added that traders that he has spoken with desire having their trade executions and data localized and housed at a single place. By co-located trading applications and historical data, it becomes easier for buy-side traders to perform pre-, mid- and post-trade analytics

Furthermore, Chin adds, “If the buy side can aggregate all of their trading onto a single provider platform, they get the most comprehensive, holistic view of their trades.  It's the need for pre-trade analytics, trade cost analysis and proving best execution that are also driving the demand for a single vendor, end-to-end solution. This in turn is also driving the speed of adoption of electronic trading across multiple asset classes, because it's much easier for a client to prove best execution when they can trade electronically.”

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