Gaming the Markets

After wandering the aisles of last year's Securities Industry Association's technology conference, I wound up with a distinct feeling that the Level 2 quote screen's days are numbered.

Of course, it won't disappear in the next year or two, but it's going to fade away as more traders have to focus on multiple markets and instrument types.

The hottest trend in GUI design is how to convey the greatest amount of information to the trader using the least amount of screen real estate. Heatmaps have been around for a number of years and vendors such as Fractal Edge have developed the ability to drill down from the heatmap GUI and provide more granular information with each successive drill down into the data.

A few vendors have even brought sound-based interfaces to the market. Some allow remote traders to listen to virtualized pit noise to detect market momentum. Other vendors have assigned the sound of specific musical instruments to specific market movements. If you hear the bassoon running down the scale, get out of that position as fast as possible.

The only thing I have yet to see is a tactile user interface, but I'm sure it's only going to be a matter of time before we see USB-enabled footrests that send vibrations through the trader's footwear to indicate market movements.

Trading is becoming a true multimedia event.

The biggest question, however, is whether the interfaces are changing too quickly for the traders who will use them to keep up with. I know a few people on the Street who still miss their old green screens, and for whom the explosive growth in new interfaces is a sensory overload.

How will the industry find traders that will adapt quickly to the new interfaces? The easiest answer is to grow them.

Last month I attended a panel discussion at the Securities Industry and Financial Markets Association's (SIFMA's) annual fixed-income technology conference in midtown Manhattan and found quite a bit of truth in an off-the-cuff joke made by a panelist during one of the sessions.

The panelist was speaking on electronic execution for alternative asset classes session and said that he knew of one firm where part of a trader's job interview consisted of playing video games to test hand-eye coordination. That's nothing new, but he then he jokingly suggested that someone should connect a real-time market data feed to a game console so that people could learn to hit prices all day.

That's when it hit me.

Think Orson Scott Card's science fiction novel, Ender's Game. For those not familiar with the book: Alien invaders are decimating humanity, which responds by training its children as warriors through a series of physical and strategy "games" and exercises to defeat the invaders.

Can the same game strategy be used to train the next generation of traders?

Reuters won't release its own game control and you won't see a Bloomberg terminal nestled between your teenager's Xbox 360 and PlayStation 3. But is it beyond the realm of possibility to think that some brokerage or hedge fund could approach a game-design shop to develop a thinly veiled trading game to spur interest and skills of future traders?

If firms wind up developing these new trading simulators, why not release them into the wild? Viral marketing works wonders in the Internet Age.

Rob Daly is editor of Dealing with Technology and can be reached at rob.daly@incisivemedia.com. For a free 6-issue trial to DWT, visit www.dealingwithtechnology.com.