Algorithms: Trading multiple asset classes simultaneously

The idea of being able to trade across multiple asset classes is something that has been discussed for a while. Now we're seeing the likes of UBS, Goldman Sachs and Credit Suisse developing these algorithms that combine related orders in different asset classes to a single trade.

A classic example would be an algorithm that would buy stocks and open a covered call position at the same time. But you might see some equity trades link to foreign exchange positions, futures or exchange traded funds. There are a host of possibilities; arbitrage would appear a likely goal.

Traders magazine says that the market for this stuff is in the inchoate stages. But hedge funds certainly are intrigued. Broker dealers see traditional asset managers as future customers as well. It takes some re-jiggering across the spectrum. The buy-side still has yet to get its processes organized around anything but single asset tools.  

For more:
- here's the article

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