Tom Binks Director, Derivative Products, Reuters Treasury Broking Services
Tom Binks Director, Derivative Products, Reuters Treasury Broking Services

The electronic trading of derivatives – is it here at last?

Derivative volumes continue to grow and Tom Binks explains how he and many of his industry colleagues expect to see a continued migration of business from voice to screen based trading.

First Published: e-Forex Magazine 17 / Features / January, 2005

In a much quoted contribution to the debate about derivatives one of the industry’s strongest supporters, Federal Reserve Chairman Alan Greenspan, called attention to the importance of automating the trading and settlement of derivative transactions:“...the way that OTC derivatives are traded and settled clearly could be significantly improved. Despite, or perhaps because of, the rapid pace of product development, the derivatives industry still executes trades predominantly by telephone and confirms them by fax. Systems for the electronic execution and confirmation of trades require a degree of standardization and a large measure of cooperation that are not required for developing new instruments. Still, the derivatives industry has a long history of cooperating to standardize documentation, and it is disappointing that so little progress has been made in adopting efficient and reliable means of executing and confirming trades.” (Global Finance: Is it slowing?, March 7, 2003)Since then...continued

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