Tuesday 9 February 2021 6:15 am

Electronic trading surges with traders eyeing the impact of machine learning

Professional traders are anticipating artificial intelligence and machine learning to be the most influential technology over the next three years. 

JP Morgan’s flagship survey reveals more than half of professional and institutional traders anticipate machine learning to lead technology. 

Currently a third of client traders predict mobile trading applications to be the most influential this year. Certainly the Reddit Gamestop rally powered by low cost trading platform is already testament to just how quickly the environment has changed. 

Electronic trading picked up last year and all surveyed expect to increase electronic volumes this year. FX electronic trading to increase six per cent over the next two years to 84 per cent while credit should climb 12 per cent to 40 per cent. 

“Year-on-year, the first half of 2020 saw a 45 per cent increase in volume of transactions and March, perhaps unsurprisingly, saw a new high water mark for notional value traded on the bank’s Execute on Mobile channel,” Richard James, JP Morgan’s head of macro markets execution said. 

“The surge in activity was driven by what was also a new high in external client logins, about 30 per cent of the bank’s user base were actively transacting over the channel with the balance accessing market information and analytics.” 

Banks and other financial institutions are already starting to use AI to execute trades quicker and more efficiently. The vast majority of surveyed traders – 71 per cent – agree that machine learning provides deeper analytics while just over half agree it optimises trade execution. 

Looking forward to this year, just under half of those surveyed believe the pandemic will continue to have the biggest impact on markets this year. In a sign of just how much the pandemic has taken over market discussions, international trade tensions come just fourth in traders’ concerns, with only nine per cent concerned over the prospect of trade wars. 

When it comes to traders’ day-to-day life 55 per cent will continue to work from home for average of four days a week. 

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