Earlier, I mentioned that former Zurich Stock Exchange CEO Dr Richard Meier (pictured) had given an excellent presentation at the 2008 Zurich SFI Doctoral Dinner about the development of automated trading.
Dr Meier described his research as a finance doctoral student in the 1960s, a period when the finance industry began in earnest to harness computers in financial trading. As a doctoral student, Meier found himself writing an important report about the feasibility of automated trading.
His research was revealing that a key challenge for the development of automated trading was the cumbersome interface between man and machine. "The automated trading technologies seen later, in the 1980s, were the product of a lengthy period of development in the field of man-machine interaction," he said.
Globalization has also shaped the evolution of automated trading. As financial trading became more global, connecting traders at a global level came to be more important than sustaining the extremely high level of interconnectivity between traders at a local level, explained Meier.
"Automation became a necessity in this context, so globalization has really helped the development of automated trading", he said.
The next event on the SFI Doctoral calendar is the Swiss Doctoral Workshop in Finance, Study Centre Gerzensee, June 2-3 2008.
1 comment:
Hi SFI,
I just stumbled on your blog today and I have added it to my blogroll. I am coming to Lausanne this autumn to complete my MSc in Economics and Finance at the HEC Lausanne. So I thought that I would have a look at what Swiss Econ and Finance geeks were up to; it definitely seems as if I have come to the right place :).
On the topic of automated trading I think that there are huge efficiency gains to be had in terms of 'infrastructural' benefits (perhaps even positive externalities although any succesful system would most likely have to be under raps as per function of its creator's wish).
However, does it work? Well, I have no idea really. I always thought that the alliance between economics and physics (econophysics) was an unholy one but if your objectives are sound I think it can be a good way to go (i.e. we should not expect to be able to 'predict' anything). As I said, automated trading holds the potential to reap efficiency benefits when executed properly but who the hell do we call if it goes wrong?
In any case, I am glad that I stumbled on this site.
best
Claus
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