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Market experts discuss high-frequency trading and the “futurization” of swaps

2 min read

Modern Money

High-frequency trading and the “futurization” of swaps were hot topics Monday during the “Evolving Capital Market Dynamics” panel discussion at CME Group’s annual Global Financial Leadership Conference in Naples, Fla. Market experts weighed in on what is and isn’t high-frequency trading, how it can be improved and whether it poses a threat to market stability. They also discussed the role futures will play as the market evolves and what will become of proposals in various jurisdictions to implement a financial-transaction tax.

The panel included GETCO CEO Daniel Coleman, Jeff Jennings of Credit Suisse, “The Speed Traders” author Edgar Perez and Richard Prager of BlackRock


  • Perez on trading losses at Knight Capital Group: The technology is there, but there are also human processes involved. It wasn’t a high-frequency problem. “At the end of the day, it was a human error.”
  • Prager on the futurization of swaps: “Futures products can outpace [over the counter] if they can be offered with margin efficiency and in a safe environment.”
  • Jennings on the image of high-frequency trading: ” We have to do a better job as an industry of demystifying the markets and the trading strategies.” It is hard to fix after a market event has occurred.
  • Coleman on technology’s effect on market confidence: “Large technology changes lead to these kinds of uncertainty. It happens across all industries.”
  • Prager on uncertainty surrounding swaps-execution facilities: “We know what SEFs are, but we don’t know the rules and we don’t know if they are going to work. … Price discovery is only one aspect of transparency. Depth of book can be just as important.”
  • Perez on proposals for a financial-transaction tax: “A transaction tax would be a step back in the evolution of the markets.”