Technologically, the way for electronic trading was paved by Application Program Interfaces (APIs), which enabled pricing, risk, and quotation management systems to ‘talk’ to each other via a standard interface, such as the FIX protocol.
That breakthrough, plus an increased availability of data, plus market-structure changes brought about by regulators, opened up broad swaths of securities markets to point-and-click transactions, and the adoption of electronic trading showed steep increases from 2001 through about 2008. But the rates of increase subsequently flattened, in some cases to near zero annually, as certain types of transactions remain stubbornly incompatible with the screen.
Electronic trading in equities increased from about 25% of total market volume in 2001 to 95% in 2010, about where it has remained since, according to Aite Group data. The path to electronification has been slower and more uneven in fixed income. Electronic trading in U.S. Treasuries rose from 12% of volume in 2001 to 52% in 2010; that has increased only about another eight percentage points since then, to 60%. About 30% of corporate-bond trading executes via point-and-click, according to industry data.