High frequency trading has soared in Asia, but the trading method has been under the regulatory spotlight in recent months because of its role in the 'flash crash' of May 6 in the US markets. Mike Gilbert, Newedge’s global head of professional trading groups, explains to FOi what’s driving the growth in Asian algorithmic trading, which countries are next for expansion, and what the fallout from US regulatory intervention entails.
The rise of high frequency trading in Asia has been nothing short of remarkable. The Singapore Exchange is just one bourse that has recorded substantial growth in the number of trades executed using algorithmic strategies. In its 2010 financial report, SGX said 27% of all derivatives trades were executed by high frequency trading firms. In 2009, the total was just 17%.
So what’s driving the growth? One man who ought to know is Mike Gilbert,...