Count Thompson Reuters Corp. among the believers in the power of high-frequency trading. As The High-Frequency Trading Leaders Forum 2011 New York discussed, there is indeed independent research that shows that high-frequency trading has a positive impact on global capital markets by increasing liquidity and reducing price volatility, findings that could allay some of the popular and political concerns over the strategy.
As seen in The Wall Street Journal and reported by Jessica Mead, Thomson Reuters Corp.(TRI) is beefing up its high-speed Elektron data and
trading service to include foreign exchange markets, the company said in a statement Monday.
Elektron currently only connects to Thomson Reuters Matching, the company’s own currencies trading platform, but Thomson Reuters anticipates that independent platforms will become available over time, saying the door is now open to these liquidity providers to make their prices available through Elektron.
Thomson Reuters said that the move is in response to the rapid growth in high frequency foreign-exchange trading.
The Bank of England estimates that up to a quarter of all trades in London–the world’s biggest foreign-exchange market–now stem from high-frequency trading funds. This is expected to grow, with Boston-based research firm Aite Group estimating that high-frequency trading will account for 40% of overall currency volume by the end of 2012.
Elektron, which was launched in April 2010, was designed initially to improve the speed and efficiency of equities trading. The addition of currency markets is a “natural progression”, a spokesperson for Thomson Reuters said.