It seems like ages ago, but it was just two weeks back that we at Advanced Trading hosted our annual Buy Side Trading Summit in Florida. And while the agenda was put together months ago and speakers set, everything was re-vamped as Wall Street was spun into a period of historical volatility and change as the effects of the credit crisis widened.

This year we focused on some very timely issues that are or should be on every buy side traders’ mind. One area in particular that stuck out for me and for many attendees was the ongoing discussion about how trading has changed, what traders are doing differently in these difficult times and how they see the market going forward.

There were a few high-level topics that kept coming up – traders going back to basics, communication being more important than ever, survival of the fittest and of course, liquidity, liquidity, liquidity.
The attendees, top buy side traders, trading managers and trading technologists noted that during high volatility times, they were moving back to Direct Market Access (DMA) versus traditional algorithms as a faster way to reach markets.

Communication was also something traders felt was particularly important and has changed significantly since the credit crisis began. Whether it was communication with portfolio managers, communication with upper management or even communication with the sell side. Consensus around talking, sharing and getting the full picture to everyone at the firm was key.

No one at the event could ignore the fact that day in and day out more firms and hedge funds are merging and consolidating or even shuttering their doors. One person even put the number of hedge funds going out of business at 50 percent, which obviously presents some unique challenges and opportunities in the market place.

With so much happening in the markets though the discussion kept coming back to liquidity. There was talk that traders need to help their fund managers understand the liquidity factor more and manage their expectations during these turbulent times. But there was also the fact that while liquidity is different now, it is still a very trade-able market and buy siders were still seeing success.

I’ll be working on a broader piece looking into these issues and how trading has changed in the past year for the February issue of Advanced Trading. If you have any comments, ideas or reflections on how trading has changed for you as a buy side trader, please feel free to email me at cmceachern@techweb.com.

Please Note: The Buy Side Trading Summit was an off-the-record event. The information in this blog was culled from general thoughts and topics coming out of the event.