The telephone, long the centrepiece of trading desks, is set to be eclipsed by electronic systems next year as Canadian money managers increasingly send orders to exchanges via computer, according to a new study.
Those trades are also increasingly going to be routed away from the Toronto Stock Exchange, the survey of big Canadian money managers by Toronto-based Competitive Metrics showed. 90 per cent of money managers in the survey said that they will route some trades to the new electronic markets.
"The telephone will be replaced by electronic order routing as the dominant way of trade communications," states the report's author, Jackie Chung.
Ms. Chung, founder and president of Competitive Metrics, said "buy-side traders now have no choice but to find liquidity wherever it is, driving the alternative marketplaces to go mainstream in 2008."
"The TSX is one of the biggest embracers of technology," Ms. Chung said yesterday.
Ms. Chung said that when she did a similar survey two years ago, traders predicted the imminent demise of the telephone as a main trading tool, but it took longer than expected. The phone was still used for 52 per cent of stock trades.
"Back in 2005, the technology infrastructure was just starting to take shape," she said. "Now we have a critical mass."
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