Recent market volatility has accelerated the value of quantitative data for both buy-side and sell-side participants says Deutsche Börse’s Stefan Schlamp, and firms already equipped with analytics tools are gaining insights into participant behavior, auction dynamics, and order flows.
Retail trading surged, especially in volatile U.S. stocks, prompting European exchanges like Xetra to introduce features such as the Retail Execution Service, improving price outcomes for retail investors. Looking ahead, the head of quantitative analytics says innovation lies in combining structured and unstructured data into unified platforms. Deutsche Börse, for example, is evolving toward a single data marketplace, offering easier access to analytics, market, and reference data to support broader, more integrated trading strategies.
Transcript
Jo Gallagher How has the recent volatility across markets actually changed buy-side and sell-side consumption and use of quantitative data?
Stefan Schlamp So the usage of the quantitative data, usually has a lot of lead time. People need to test data. They usually evaluate it and implement it into the trading strategies. But now, it was the perfect timing for people who had gone through this a couple of months ago to now finally see the value in it. Volumes ticked up, volatilities ticked up, the composition of the participants changed a little bit. What is now interesting to see right now in the data publicly available, how the different participant groups actually handle the situation. Who was the net buyer? Was it a prop? Was it market maker, agents? Who did the buying? Who did do the selling aggressively, passively? How did people behave in the auctions? Did they favor the auctions or not? So and all this kind of now can be seen in the data. And then also kind of to help you position your portfolio then overnight, to the next day. That was kind of exciting.
Jo Gallagher The recent volatility has also increased volumes across retail trading in US stocks. How do you see the likes of quantitative analytics actually playing a role in helping with engagement across European equities?
Stefan Schlamp That’s kind of interesting. It seems like for retail, volatility is a feature rather than a bug. So definitely retail volumes have exploded, also, in the US stocks, the Magnificent 7 because they are very volatile. But I think from the point of view of the exchanges, we try to move more retail volume back onto the primaries because at the moment, not very much reaches the primary. A lot of it gets absorbed into these single-dealer platforms. Right? And so on Xetra now, there’s this cool feature. I think it’s called Retail Execution Service. But what it does is liquidity providers, they can post quotes which do not interact with any of the other book. So you’re guaranteed to only interact with the retail orders. And so that allows the market makers to quote tighter spreads. And we do see quite a bit of uptick. We see like the average incoming retail order gets like three euros in price improvement. And the program now is a year old. When you breach the threshold of 1 million euros total price improvement to retail investors.
Jo Gallagher Interesting. And that kind of feeds into my next question. So looking ahead, like what are some of the biggest innovations that you’re seeing in quantitative data analytics, and how can they also help encourage greater engagement in equities?
Stefan Schlamp So I think now it’s about combining multiple different data sets, not all from us, from other exchanges, from other data providers, structured, unstructured data. For example, yeah, so we’re currently making this transition from our narrow data shop, kind of a wider marketplace, where we offer products from the entire Deutsche Börse groups. So, you know, there will be a single interface, a single contract, right? And you get the market data, the analytics, the reference data, ETF compositions, NAVs, everything in one place. As soon as this is live, right, I’ll ask our team to entitle me to and then I finally will have a lot more material to analyze.
Jo Gallagher It was a pleasure speaking to you, Stefan. Thank you for joining us.
Stefan Schlamp Thank you.
Jo Gallagher I’d like to thank Stefan for his insight, and of course you for watching. To catch your other shows including Trader TV This Week, every Monday at 6.45 UK time, go to Tradertv.net.
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