High-Frequency Trading Is 77% of U.K. Market

Source: Bloomberg (January 24, 2011)

High-frequency trading accounts for 77 percent of transactions in U.K. markets, according to a study by research firm Tabb Group LLC.

Orders from long-only funds that bet stocks will rise, hedge funds and retail investors account for 23 percent of activity in continuous markets, the group said in a report today. High-frequency trading, in which firms may transact thousands of times a second, accounts for the rest. The practice makes up 35 percent of the 3.9 trillion-euro ($5.3 trillion) U.K. turnover when over-the-counter transactions and other non- continuous trading is included, Tabb said.

Tabb’s data covers what it calls continuous markets where trades occur electronically, including venues where prices are publicly displayed and dark pools, where they aren’t. Over-the- counter trading, conducted away from exchanges and alternative systems, isn’t included, Tabb said. The U.K. makes up about 21 percent of all European trading, Tabb said.