The Globe and Mail – By Boyd Erman – May 29, 2012
Canadian money managers have long been slow adopters of electronic, algorithmic trading, preferring to deal with traders in the more old-fashioned way. But as returns slump, leading to pressure to find savings, that’s changing pretty quickly.
A survey by Greenwich associates shows that 22 per cent of Canadian equity trading dollar volume is getting done by electronic means, up sharply from 17 per cent a year ago. The expectation is that it will reach 27 per cent in three years.
Meantime, the so-called high-touch business, where a portfolio manager deals with a trader at a brokerage who handles the transaction, now accounts for 71 per cent of volume, down from 78 per cent a year ago. That’s heading lower, to 65 per cent in three years, those surveyed said. Still, that’s higher than the 50 per cent level to which high-touch has fallen in the U.S.
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