When it comes to the markets, most people assume correctly that trading has become a technology-greased activity, featuring executions in near-microseconds and an arms race for hardware and software. That's an accurate description of the cash equities market. But when it comes to the bond market, the level of technological sophistication has sorely lagged.

That is starting to change, however, according to recent research from the Tabb Group. It suggests that major dealers are embracing a new generation of trading software that has boosted trading capabilities immensely.

Electronic trading of fixed-income products is not necessarily novel. But "these new marketed solutions are intended to streamline the execution process through support for limit prices (or spread); algorithmic functionality for multi-leg and cross-asset class orders; implementation of enterprise-wide liquidity management; and automated quoting and internal trade matching."

This sort of sophistication is spreading to just about every other market as well, notably options, futures and especially currency. There might be some quants out there dreaming about a "Theory of Everything" algorithm that can link all of these markets in ways now unseen. Does such an algo exist? Tell us about it.

For more:
- here's the Tabb Group press release

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