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Article

Title: E-Tools Energize Buy-Side Trading

Author: Schmerken, Ivy Article Type: Product Analysis
Source: Information Week, n1049 p44(3) Publication Date: Jul 25, 2005
  ISSN: 8750-6874
URL of Publication: http://www.informationweek.com

Buy-side traders are turning to electronic stock trading as a way to gain better control over the complex process of purchasing stock. Many traders continuously scan up to a dozen trading sites, including Bloomberg TradeBook, LiquidNet, Posit and Archipelago, as they seek to enhance their portfolios. The fact that many brokerage firms are providing both algorithms and market-access tools is changing the relationship between buyers and sellers, with buyers becoming more savvy due to such factors as increased information and powerful transaction-cost analysis applications. Buy-side traders are now executing 20 percent of their orders electronically, and a further 11 percent by utilizing algorithms. Along with this, telephone-based traffic is declining, and expert projections suggest that by 2007, only 20 percent of orders will be taken over the phone. While many buy-side traders continue to value their relationship with the sell-side, others are taking on scale characteristics of the sell-side on their own. This presents a challenge to sell-side vendors to add value to their service offerings. The upshot is that buyers are taking a greater degree of control over their order flows, adding metrics that enable them to assume risk and maximize returns.

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Online Stock Trading

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