A new report from Aite Group, LLC provides an overview of the current and future state of smart order routing, based on an Aite Group survey of 18 leading smart order routing (SOR) providers. The report also includes insights from firms leveraging SOR technology to develop a roadmap for next-generation SOR platforms.
As liquidity continues to fragment globally and firms put multi-asset and multi-geographic trading strategies back on the map with improving markets, smart order router providers must prepare to support the expansion. Further, Aite Group expects demand to increase over the next 12 months, in part supported by guerilla marketing through the attention on high frequency trading, to exceed US$1 billion in 2010. The majority of those dollars support brokerage providers. Aite Group expects 95% of the firms leveraging a smart order router do so through one or more brokerage providers.
“Though top broker/dealers possess the market intelligence and order flow to deliver the best fills in predominant instruments,” says Adam Honor, research director with Aite Group and author of this report, “complex event processing and trading technology providers tend to offer more diversified asset classes, and are popular with firms willing to go it alone.”
The report profiles 18 providers of SOR technology, including brokerage firm providers (BNY ConvergEx, Goldman Sachs, Instinet, Knight Direct, BofA Merrill Lynch, SunGard Assent and UBS), CEP providers (Aleri Labs, Progress Apama and Streambase) and trading technology providers (FlexTrade, Lava, Marketcetera, QUOD Financial, RealTick, smartTrade, SunGard Global Trading and ULLINK).
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