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#1 24-06-2020 07:00:21

johnedward
Admin & Trader
From: Paris - France
Registered: 21-12-2009
Posts: 2831
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How will the virus affect the future of trading?

How will the virus affect the future of trading?


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The virus situation has changed many things in the world of trading. The good and bad is visible in the trading markets, but one thing is certain, the virus will certainly make history.

Increased volatility, negative prices and a renewed interest in trading, all of this has happened in recent months, and all of this is directly related to the virus situation.

Because of its impact on trading, it's quite natural that trends emerge from this event and that they will last in the long term, such as remote work, increased interest in trading and more.

The trading technology and infrastructure that brokers use have supported all of these changes and activity in the markets.

In addition, the industry was indeed caught off guard by negative oil prices, as prices for WTI (West Texas Intermediate) futures fell to negative levels 2 months ago. Until now, many trading platforms could not handle negative prices.

However, the industry has already adapted. MetaQuotes, publisher of the forex's most popular trading platforms, has added negative price capabilities to its MT5 platform.

Could the virus situation influence trading technology?

The question therefore arises as to how the virus situation could influence the future of trading. According to the makers of cTrader, another popular trading platform, the emerging trend towards more flexible working conditions and post-virus remote work will influence traders' behaviour.

"Working from home" can therefore translate into a need to "trade from anywhere" in the investment world. This has increased the demand for mobile access to the markets, including the use of Virtual Private Servers that can run 24h/day.

We are also seeing huge price shifts, unprecedented volatility and rare events like negative prices. Volatility is expected to stay with us for the next few months and this has been seen as an opportunity for more people to engage in trading in order to take advantage of the situation.

Were the negative oil prices exceptional?

Charalampous, a cTrader (Spotware) executive says that although negative prices have taken the industry by surprise, their company hasn't seen significant demand from brokers for negative pricing, as many think this was only a 1-time event.

Nonetheless, he says that negative prices are something that technology providers should take seriously since there is no guarantee that such events won't happen again. Therefore, cTrader plans to add such capabilities to its platform.

Trading infrastructures feel the heat

The virus situation has shed light on some issues faced by brokerage firms: high volatility and unprecedented price movements. All of this has strained brokers' customer support departments.

"This led to an increase in the workload of the brokerage firms. And all of this had to happen in the midst of a deadlock period that forced brokers and technology providers to restructure their operations and processes to adapt to a "work from home" environment. On the infrastructure side, the increase in trading activity did not cause any problems since trading platforms are designed to deal with activity spikes", says Charalampous.

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