The electronification of the markets is a trend that has no end in sight, according to David Cannizzo, MD, Head of Electronic Trading at Raymond James.
“Yet I believe in the enduring value of human traders in the market,” he told Traders Magazine.
Through his career lens, Cannizzo has witnessed firsthand the “insights and intuitive judgments that skilled human traders bring to the table”, often outperforming algorithms.
“Nonetheless, my professional focus lies in the electronification of markets, and the data continues to show a steady uptick in electronic trading usage across various countries and products, including things like fixed income securities,” he said.
He thinks that the industry will find a footing in a more hybrid model, where a traders role on both the buy-side and sell-side will continue to evolve to “something a bit different then what it has been historically”.
According to Cannizzo, as various asset classes move to electronic trading, technological synergies could lead to easier trading across asset classes.
“In the equity markets specifically, algo wheels continue to move into trading strategies historically handled by the cash desk,” he said.
With over 20 years of Equity Sales & Trading experience, Cannizzo said he has been “in love” with the stock market since he was ten years old.
Cannizzo joined Raymond James in November 2018 with the mission of spearheading the development of their electronic trading offering, known as RJET (Raymond James Electronic Trading).
The objective was to create a proprietarily designed platform utilizing cutting-edge tools and technology, providing their clients with a “best-in-class solution for achieving optimal execution”.
“Our aim was to ensure Raymond James remained aligned with our clients’ needs and workflow, providing them with the most advanced trading capabilities available,” said Cannizzo.
“While we don’t advertise or discuss our trading volumes publicly, in a very short period of time we have moved inside the top 20 in US electronic market share and our client base continues to grow,” he added.
Cannizzo said that Raymond James operates on a straightforward business model centered around assisting clients in achieving their investment objectives.
“Our core values are to put clients first and provide them with the highest level of service with integrity,” he said.
The initial offering was to provide clients with access to algorithmic trading capabilities in North American equity markets.
“Over the past year or so, we have added staffing globally and now offer access to algorithmic strategies in Europe and Asia,” he said.
In addition to RJET, the firm offers other products and services such as Block/Cash Trading, Options Trading, Portfolio Trading, ETF Trading, and Event-Driven Trading, among other offerings, ensuring that clients have access to a robust suite of tools to navigate the markets effectively.
“As a firm, we pride ourselves on offering a comprehensive menu of products and services tailored to meet diverse investment needs,” commented Cannizzo.
When asked about the evolution of trading technology and the impact of AI, Cannizzo said that a discussion around AI is becoming the new norm and it underscores its importance in today’s business landscape. However, before diving headfirst into the AI conversation, firms must first ask where AI fits within their processes, he noted.
“The fundamental question to address is whether AI will genuinely enhance the business and improve the client experience,” he said.
“Simply put, the goal shouldn’t be to adopt AI for the sake of it, but rather to implement solutions that address existing challenges and drive meaningful improvements,” he added.
Cannizzo further said that equity trading algorithms have been using some form of machine learning and AI for years.
“Our strategies utilize various forms of AI or Machine learning as they are digesting a multitude of real time factors to make trading decisions and optimize outcomes,” he said.