Product Type: Market Research Report
Published by: TowerGroup
Published: September 2004
Product Code: R301-1044Description The institutional trading market continues to change rapidly with greater automation and more order flow going through electronic trading strategies like DMA and algorithmic trading. Buy-side firms and hedge funds have jumped on the direct market access bandwagon attracted by lower commissions, anonymous trading, improved speed of execution, and the availability of sophisticated trading tools that facilitate connectivity into execution venues. But the widespread availability of DMA indicates rapid commoditization of this market and will lead to lower margins and more pressure on brokers to differentiate their agency services. This TowerGroup Note examines various aspects of the DMA market including trends in buy-side DMA adoption, share volumes and future growth.Table of Contents - TowerGroup Take-Aways
- Report Coverage
- Vision
- How Will Electronic Trading Strategies Like DMA Impact Institutional Trading?
- The Changing Nature of Institutional Trading
- Unbundling Services Within the Agency Brokerage Model
- Exhibit 1: Categorizing Agency Brokerage Services into Two Broad Groups
- Analyzing Trade Execution and Growth of a Hybrid Market
- Exhibit 2: How Buy-Side Order Flow Is Executed Through Different Trade Strategies
- Direct Market Access
- Exhibit 3: How DMA Operates in Institutional Trading
- Quick Background on DMA
- What's Driving DMA?
- Exhibit 4: What's Driving Asset Managers to Adopt DMA and Brokerage Firms to Provide It?
- Commoditization of the DMA Market
- DMA: Volume, Adoption, and Nature of Order Flow
- Exhibit 5: Market Share of Total US DMA (2004)
- Estimating Buy-side DMA Volume
- Exhibit 6: The Rising Share of DMA in US Buy-side Trade Execution (2000-06)
- What's DMA Adoption Like?
- Direct Market Access in the International Market
- Summary
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