One of the largest investment banks, JPMorgan Chase, is expanding its algorithmic trading offers to US Treasury investors, betting on the high potential of this trading strategy. Analysts at JPMorgan believe that computing power can help its clients succeed in the world’s biggest bond market. Algorithmic technology analyzes bond prices in various venues to determine the best way to trade them. Yet, this strategy is not so widely used. For example, algo trading is very rare on Forex. At the same time, the situation is changing as more platforms for trading Treasuries have appeared in recent years. Automated trading should boost the number of trades, making their execution easier and reducing the spread between bid and ask prices. On the other hand, algorithmic trading could contribute to high volatility especially when markets are stressed. The algo execution framework was designed to trade any asset class. Initially, there wasn’t strong demand for this trading tool but now it has increased significantly in different trading venues and continues to gain traction.
