Virtual reality: A new way to trade

Since the pandemic sent financial traders home from the trading floors, the professionals have encountered a number of challenges arising from remote trading.

Like most industries, trading was forced to find new ways to operate in increasingly restrictive conditions. The stage was perfectly set for virtual reality (VR) companies to enter the trading arena.

The benefits of VR trading

As the work-from-home trend continues, virtual reality companies and financial firms have begun to explore ways to enhance the experience of home-based trading.

While VR trading is still at its early stage of development, many believe it represents the future of trading. Not only is the technology expected to replicate the advantages of brick-and-mortar trading floors, but also overcome the limitations of physical spaces.

In most cases, a trader can see no more than six to eight screens on a physical trading floor. VR, however, allows traders to view and interact with dozens of screens. As a result, traders can handle much more data at a time than they can do in physical spaces. 

VR also enables traders to see data in 3D and overlay data on top of one another. Such a feature gives financial professionals more flexibility to customize their research and analysis without any physical restrictions. 

UBS’s virtual trading floor trial

Leading investment bank UBS is one of the pioneers in turning living rooms into trading floors using VR technology. 

In light of the fact that many of its traders will continue to work from home in the foreseeable future, in late 2020, the Zurich-headquartered bank started to explore the feasibility of a virtual trading floor.

UBS’s London-based traders were given Microsoft HoloLens headsets, which simulated the environment of a busy physical trading floor. The trial aimed at providing UBS staff with an immersive trading experience from the comfort of their homes.

The investment bank’s “Reimagining the Trading Floor” working group also experimented with introducing screens that display camera feeds from traders onto staff members’ desks. This encouraged collaboration between traders, making UBS’s virtual trading floor even more realistic.

While UBS took the lead to introduce virtual trading floors in response to the Covid-19 crisis, financial software developer FlexTrade came up with its first VR trading program as early as 2017. 

FlexTrade’s groundbreaking VR trading program

FlexTrade’s program combined a collection of charts, data and information with a physical setting through augmented reality. The technology allows traders to simultaneously visualize and process data in both the virtual and physical dimensions.

Although the fintech firm’s invention was still in its infancy, it was met with positive reception when FlexTrade presented it at a financial conference.

Virtual Reality: The Future of Trading

Now that working from home is becoming the norm, and with UBS dipping its toes into VR trading, the days when any spare bedroom can be transformed into a trading floor seem to be approaching.

At the time of writing, no financial corporations have plans to shut down their brick-and-mortar trading floors. But in this era when technology evolves faster than we can keep up with, the tides can turn at any time.