Hedge fund trading activity in US equities is growing in contrast to trades carried out by proprietary trading desks, new research has shown.
A report on low-touch trends in US equity trading indicated that trading by hedge funds and long-only asset managers accounted for almost one-third of the average US daily share volume in the first quarter of 2010. This was an increase from 25% in December 2008.
Hedge funds carry out approximately twice as much trading activity as long-only asset managers, the TBB report, US Equity Trading 2010: Low-Touch Trends, showed.
The research indicated that traders are decreasing their reliance on sales traders and turning to algorithms instead. However, hedge funds are more likely to use sales desks due to the access this gives them to ideas and research.
Over half (54%) of the hedge fund traders interviewed by TABB used a sales desk as the execution venue for their trades compared to 38% of other asset managers. Nearly one-fifth (18%) of hedge funds chose an algorithm, compared to 31% of long-only managers.
Full article at – http://www.hedgefundsreview.com/hedge-funds-review/news/1722788/hedge-fund-trading-volume-rises-algorithms-popular
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