04 October 2022
Even before Liz Truss took on the role of PM of the UK, there was market volatility, concerns about the future and uncertainty. While it is fair to say that many of the issues faced by Liz Truss in her first few weeks in office were out of control, the current economic concerns would appear to be a direct result of her policies. Is this a dream scenario for short-term traders?
In the current environment, incredibly fast-moving markets, trade execution and clearing services are featuring prominently. While the UK economic outlook isunpredictable, there is also a certain degree of volatility over the pond in the USA. Using options markets, traditional markets and futures markets, many traders are looking for that optimal trade execution opportunity.
Many day traders are now able to buy and sell stocks in not only their domestic market but also international markets. Significant developments in dealing technology have sped up the process of trade execution, but timing is still down to the trader. Trading in markets that can quite literally turn on a sixpence is not easy; holding your nerve and sticking to a trade execution plan are challenging. As we await the November budget, there could be even more volatility to come!
As a short-term/day trader, it is essential to appreciate the role of clearing services, both in the UK and worldwide. Partnerships between different clearinghouses and stock markets mean that you can trade stocks in the US as easily as you can in the UK. When looking at clearing services, it is essential to know settlement dates and when your funds are available. Over the last 20 years or so, there has been a gradual reduction in the settlement timetable. While not yet a cash settlement system, many clearing services are now able to settle transactions within just a couple of days as standard.
The critical role of day traders, and other short-term traders, is often misunderstood when it comes to stock markets. While some traders will buy and sell stock on a "swing" basis without necessary looking at fundamentals, others will research companies in great detail. Whatever type of trader we are looking at, the frequency of trade execution continues to have a considerable impact on liquidity. Liquidity is the lifeblood of any stock, opening up potential investment by institutions and more prominent investors.
Here at Global Investment Strategy, we are committed to continuous investment in new technology to enhance trade execution. Low latency execution ensures that trades are processed as quickly as possible, often directly with markets via online services. We appreciate the importance of trade execution, clearing services, and the ability to maximise available funds. Leaving traders to trade!
The fact traders rarely discuss these behind-the-scenes services suggests that they work as they should. Our clients can trade as frequently as they wish with the knowledge that we have efficient behind-the-scenes trade execution and clearing services. Embracing new technology has also allowed us to expand the number of stocks available, extend trading times and bring the global stock market to your doorstep.
As many traders look towards the current volatility with a degree of anticipation, it is crucial to appreciate developmentsin trade execution and clearing services technology. Very rarely discussed, recent enhancements in these services are the foundations upon which short-term and day traders operate. Confidence in the system allows them to focus on investment opportunities, many of which can come and go in the blink of an eye.
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