The average buy-side trading desk budget is just over $2 million annually, inclusive of both technology and compensation, with roughly one-third allocated to technology spending, according to new research published by analyst firm, Coalition Greenwich. In aggregate, its data shows that buy-side firms spend over US$10 billion annually on technology.
“To put these figures into context, it’s important to understand the demographics of the respondents,” writes report author Brad Tingley, research manager for market structure & technology at Coalition Greenwich. “Fixed-income trading desks in our study span across both rates and credit markets. Half the fixed-income respondents trade both rates and credit products, while the other half remain focused on a single asset class. In total, 56% of the fixed-income traders trade US corporate bonds, 44% trade U.S. Treasuries, and 44% trade interest-rate derivatives. For equities, the respondents are primarily responsible for cash equity trading, although just under 50% also trade equity derivatives.”
The primary research was conducted during Q4 2021, when Coalition Greenwich interviewed 185 buy-side traders across the Americas and EMEA as a part of the annual Market Structure & Trading Technology Study. Respondents were asked a series of qualitative and quantitative questions focusing on the organisation of their trading desk, budgets and the technology tools used.
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