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FICC e-Trading
2021 Survey

Now in its fifth year, the annual J.P. Morgan e-Trading survey collated the views of institutional and professional traders on trends for the year ahead, including how their working location and execution style have changed in a year like no other.

Head of e-Commerce Sales, Scott Wacker, and Trader Robert Kim, Head of North America Currencies and Asia Global Market Maker Trading share their views on the recent results

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Head of e-Commerce Sales, Scott Wacker, and Trader Robert Kim, Head of North America Currencies and Asia Global Market Maker Trading share their views on the recent results

The survey was conducted in December 2020, all results below reflect views at that time.

Global Markets

Traders predict that the Global Pandemic will have the biggest impact on the markets in 2021.

Global Markets Bar Graph Global pandemic 42% Market and economy dislocation 24% Recession risk 15% International trade tensions 9% Equity volatility risk 4% Other 4% Brexit 2%
Global Markets Bar Graph Global pandemic Market and economy dislocation Recession risk International trade tensions Equity volatility risk Other Brexit 42% 24% 15% 9% 4% 4% 2%
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Question asked: Which of the following potential developments do you think will have the greatest impact on the markets in 2021?

Liquidity Availability remains the top daily trading challenge for traders for the fifth year in a row. The new addition of Remote Working comes in the top five.

Global Markets Pie Chart Workflow efficiency 24% 12% 12% 29% Liquidity availability Remote working Availability and cost of data Best execution requirements 12% 11% Price transparency
Global Markets Pie Chart 24% 12% 12% 29% 12% 11% Workflow efficiency Liquidity availability Remote working Availability and cost of data Best execution requirements Price transparency
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Question asked: Which of the following will be your single greatest daily trading challenge in 2021?

Global Liquidity Landscape

When asked to rate their top three most important criteria when selecting a liquidity source, Price Consistency, Availability During Volatile Markets and Response Times remain the top three responses consistent with previous year responses.

Liquidity Bar Chart Availability during volatile markets 40% 23% 18% 48% Price consistency Response rate Response times Market impact 10% 10% 5% Hit ratios Internalization 5% Adherence to global code
Global Liquidity Bar Graph 40% 23% 18% 10% 10% 5% 5% 48% Availability during volatile markets Price consistency Response rate Response times Market impact Hit ratios Internalization Adherence to global code
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Question asked: What are the three most important criteria that you use when selecting a liquidity source?

Banks remain the top liquidity source that traders connect to directly for the third year in a row.

88% Banks Banks 88%
32% Non-Banks Non-banks 32%
28% Listed Exchanges Listed exchanges 28%
20% ECNs ECNs 20%
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Question asked: Which liquidity sources do you connect to directly?

Scott_W_Quote This was quite a challenging year and when we hit the high volatility periods, combining the manual trading and the electronic trading made a huge amount of difference to make our franchise offering as seamless as possible. Scott Wacker Head of e-Commerce Sales J.P. Morgan
Scott W Quote This was quite a challenging year and when we hit the high volatility periods, combining the manual trading and the electronic trading made a huge amount of difference to make our franchise offering as seamless as possible. Scott Wacker Head of e-Commerce Sales J.P. Morgan

Innovation, Transformational Technologies and Data

Mobile Trading Applications are predicted to be the most influential in shaping the future of trading over the next 12 months, with artificial intelligence and machine learning taking the lead over the next three years.

12 Months Bar Chart Mobile trading applications 33% AI/machine learning 19% Blockchain 7% Natural language processing 3%
12 Months Mobile Trading Applications AI/machine learning Blockchain Natural language processing 33% 19% 7% 3%
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Question asked: Which of the following technologies will be most influential for shaping the future of trading?

Richard James Quote Richard James Head of Macro Markets Execution J.P. Morgan
Richard James Quote Richard James Head of Macro Markets Execution J.P. Morgan

When asked about artificial intelligence and machine learning, traders agreed that they:

AI & ML Cards 49% Represent an opportunity to hone my trading decisions 54% Optimize trade execution 72% Provide deep data analytics
72% Deep Analytics 72% Provide deep data analytics
54% Trade Execution 54% Optimize trade execution
49% Trading Decisions 49% Represent an opportunity to hone my trading decisions
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Question asked: To what extent do you agree with the following statements regarding the use of artificial intelligence and machine learning?

FX Algos Pull-Out Icon
FX Algos

When asked "What percentage of your FX trading is/will be done via algorithmic orders?", traders predict that an additional 15% of their FX trading will be done via FX algos over the next two years. This ongoing increase is reflected in our own client FX volumes which are up 46% YoY*.

*Total J.P. Morgan Client Algo Volume traded Jan - Dec 2019 vs. Jan - Dec 2020

Data

The top three forms of data that are the most helpful in supporting execution objectives.

Data Pie Chart Ease of use or workflow efficiency/straight through processing Pricing sources – third party venue composites, evaluative and liquidity scores Dealer performance metrics and axes history Post trade transactional data API liquidity aggregation and evaluative metrics provided by an EMS solution 51% 38% 32% 52% 22%
Data Pie Chart 52% Ease of use or workflow efficiency/straight through processing 51% 38% 32% 22% Pricing sources – third party venue composites, evaluative and liquidity scores Dealer performance metrics and axes history Post trade transactional data API liquidity aggregation and evaluative metrics provided by an EMS solution
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Question asked: What forms of data continue to be the most helpful in supporting your execution objectives?

Respondents reported that Predicted and Real-time Market Conditions are the most useful data tools across their top three choices. Key Performance Benchmarks took second place across traders’ top three. This was ranked second least important in the survey last year.

Data_Cards Key performance benchmarks 18% 29% 45% Rank 1 Rank 2 Rank 3 Historical market context 15% 23% 37% Rank 1 Rank 2 Rank 3 Predicted and real-time market conditions 23% 48% 62% Rank 1 Rank 2 Rank 3
Predicted & Real-Time 23% 48% 62% Predicted and real-time market conditions Rank 1 Rank 2 Rank 3
Key Performance Benchmarks Key performance benchmarks 18% 29% 45% Rank 1 Rank 2 Rank 3
Historical Market Context Historical market context 15% 23% 37% Rank 1 Rank 2 Rank 3
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Question asked: Please rank your top three most useful data tools in order of preference.

Electronic Platform Usage

Following an increase in electronic trading volumes in 2020, what does 2021 and beyond look like?

We asked traders, "What percent of your trading volume is/will be through e-Trading channels? This includes API, multi-dealer platforms and single-dealer platforms?".

Pre-March 2020 Bar Graph FX 75% FX Options 63% Rates 49% Commodities 42% Credit 20%
Pre March 2020 FX FX Options Rates Commodities Credit 75% 63% 49% 42% 20%
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Question asked: What percent of your trading volume is/will be through e-Trading channels? This includes API, multi-dealer platforms and single dealer platforms?

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Rates traders predict the biggest increase in their electronic trading volumes over the next two years, followed by Credit and Commodities.

2020: Covid-19 and a New Way of Working

Between March and June 2020, 77% of respondents worked from home, for an average of four days a week.

During this time, 21% of respondents reported a change in their execution style, and reported that their execution style changed in the in the following way:

Execution Style Change Bar Chart Increased electronic trading 54% Increased algorithmic trading 23% No changes 15% Other 8% Increased voice trading 7%
Execution Style Change Bar Graph Increased electronic trading Increased algorithmic trading No changes Other Increased voice trading 54% 23% 15% 8% 7%
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Question asked: How did your execution style change?

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This year, 55% of those respondents that answered are expected to work from home for an average of four days a week.

18% of respondents reported that their execution style will continue to change going forward, and 100% of these respondents reported a predicted increase in electronic trading.

Execution Style Cards 10% Increased voice trading 50% Increased algorithmic trading 100% Increased electronic trading
Increased Electronic Trading 100% Increased electronic trading
Increased Algo Trading 50% Increased algorithmic trading
Increased Voice Trading 10% Increased voice trading

No changes in execution style - 0%

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Question asked: How do you think your execution style will change going forward?

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FOR INSTITUTIONAL AND PROFESSIONAL CLIENTS ONLY

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