Around 90% of futures trading will be conducted through automated dealing platforms - including market making and quantitative black-box trading systems - by 2010, according to the latest estimates from Tabb Group.
Pit trading is fading fast as nearly half of all futures markets trades are currently transacted through automated trading systems.
Tabb says the availability of sophisticated front-end trading applications is driving trading activity. By 2010 the futures markets will be dominated completely by automated trading, as the few remaining pits finally transition to fully electronic markets and voice trading becomes a small minority of total activity.
Andy Nybo, senior research analyst at Tabb Group, says vendors are delivering technology to meet increasing demand for e-trading systems.
Tabb estimates that there are more than 30,000 third-party vendor screens in use today across the futures industry, generating $200 million in annual screen revenues for the leading vendors.
Nybo says demand for sophisticated functionality "will continue unabated, coming from all sides of the market, from the largest market makers and hedge funds, to the independent trader".