Quote from sle:
First of all, fixed income is way more diverse then just the "massive bond market". Second of all, most fixed income transactions are OTC and done over the phone or Blomberg chat. Can't tell you about pencils and cigars, but the phones are still black. Yes, you can trade government futures electronically for some countries (that is, the liquid world is still only UST+Germany+JGBs), but the bulk of money still changes hands manually. If you can capture CDS or corporate spreads "in size", I tip my hat to you, so far dealer banks are not able to do it well.
Even in the "massive bond market" the vast majority of guys who trade rates or cash govies still execute over the chat or the phone. Electronic execution is just getting there in the government bond space and even there, spreads are ridiculous and liquidity is sparse. I can't even predict when corporates will go electronic and not even going to venture a guess when credit derivatives will go this way.
In the equity space, most people who trade long/short execute by hand (and thats bigger chunk of money in the hedge fund space these days). Most people who trade options do not have automated execution, simply because liquidity in the options market is still mainly bespoke. There is also a whole market for OTC derivatives that only works by appointment across all products.
All I was trying to say that automation (which you are, apparently, in love with) is not as necessary as you claim it should be. There is more to trading then scalping equities on major exchanges. I was just modifying your statement that while automation might be necessary, there is no denying that computerized R&D is unavoidable.
Look, from the previous posts, you appear to be fairly experienced and exposed to the industry. In this case you already aware of the facts on your own. If you have been deceiving me et al. and are more junior, then you should go and research OTC products, if at least to understand a bunch of drivers for the listed equity and fixed income markets.
