At the Finance Magnates London Summit 2024 (FMLS:24), Elina Pedersen, Chief Revenue Officer at Your Bourse, offered valuable insights into the evolving trading landscape during a conversation with Yam Yehoshua, Editor-in-Chief at Finance Magnates. Pedersen addressed a range of topics, from artificial intelligence (AI) in trading to liquidity provider strategies and new offerings for smaller brokers.
Understanding AI’s Role in Trading Platforms
Pedersen shed light on the difference between the hype surrounding AI and its practical applications in trading. She explained that much of what is marketed as AI is essentially machine learning, a technology that has been utilized by financial firms for decades.
“Very often, AI is just a buzzword. Many of these technologies are machine learning algorithms that have been around for years,” she clarified. “Banks and financial firms have used them for trading, market making, and pattern prediction for decades.”
What’s changing, Pedersen noted, is the increased computing power available today, which allows smaller firms and individual traders to access and analyze data more effectively.
“Now there’s enough computing power and frameworks to enable smaller companies or individual traders to analyze data, build models, and integrate them into their trading strategies,” she added.
The Evolving Trading Environment
Pedersen discussed how technological advancements are reshaping trading practices. Your Bourse, which specializes in ultra-low latency trade engines, has been prepared for such changes.
“As an ultra-low latency trade engine, we’ve always been ready because we understand how high-frequency trading (HFT) models operate,” she said.
She highlighted the importance of effective data processing, noting that brokers generate massive amounts of data that need to be normalized and leveraged for better decision-making.
Liquidity Providers and Risk Management
When addressing the role of liquidity providers, Pedersen emphasized their importance in helping brokers offer competitive pricing. She urged brokers to differentiate between the functions of a trading platform and a trade engine, explaining that trade engines handle order routing, pricing, and processing.
“Brokers must understand the distinction between a trade platform and a trade engine. Internalizing trades without fully understanding the risks can be dangerous,” she warned, advising brokers to partner with reliable liquidity providers for efficient execution.
New Opportunities for Smaller Brokers
Pedersen introduced a new initiative from Your Bourse designed to assist smaller brokers. The package, aimed at brokers managing under $1 billion in trading volume, offers access to premium liquidity providers at no cost.
“If they become a client of one of our premium liquidity providers, we provide a startup package of essential components free of charge to help them begin their operations effectively,” she explained.
Looking Ahead: Trends for 2025
Pedersen also shared her perspective on upcoming trends for 2025, noting that increased market volatility could benefit retail brokers. She highlighted gold’s growing role in trading volumes and stressed the need for brokers to adapt their risk management strategies to reflect this trend.
“The majority of trading volumes are currently in gold. It’s a predictable asset, and brokers should ensure their risk management strategies align with the instruments that dominate trading volumes,” she remarked.
She also pointed to the resurgence of cryptocurrency trading, predicting renewed interest and opportunities in the sector.
“The buzz around crypto trading is making a comeback, and we expect to see new developments in this space,” she concluded.
