Trading pros knew plenty of changes were coming in 2007. Regulation NMS was one reason. Ever-improving technology was another. But the velocity of change caught many within trading departments off guard. They had to adapt like never before.
Indeed, greater fragmentation due to the increasing use of dark pools, as more orders went “dark,” only added to traders’ difficulties in getting fills this year. It was also a year in which Reg NMS made the New York Stock Exchange floor a shadow of itself. NYSE specialist firms were ready to throw in the towel and give up their pads, as the new hybrid market made profitability elusive in a more electronic trading environment.
One memorable event of the year that impacted traders–and investors–was the credit crunch in August, precipitated by non-performing subprime loans. Equities markets were roiled, volatility nearly doubled and trading volume skyrocketed to the 9-to-10-billion-share range for about a week.
The good news was that the technology withstood the heavy barrage of usage. It bent but didn’t break, observers say. Against this backdrop, Traders Magazine presents its year in review of the top trends in 2007.
