The buy-side has expanded its use of execution algorithms for equity trades, despite difficult trading conditions and evidence of a return to high-touch trading methods, The TRADE’s 2009 algorithmic trading survey has found.
According to the survey, which will be published in full in the Q1 2009 issue of The TRADE, more than a quarter (26%) of buy-side traders now use algorithms for more than 40% of their order flow, compared with only 9% in last year’s survey.
A total of 150 senior buy-side traders based in 20 countries across the world commented on their use – and the performance – of algorithms in this year’s survey.
In December, TABB Group’s annual study of US institutional equity trading reported that sales traders had captured 44% of total buy-side flow, compared with 37% in 2007. Rather than shunning algorithms in the tough trading conditions seen at the end of 2008 and the beginning of 2009, many algorithm providers contend that the buy-side has also turned to algorithms to weather the storm.
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