Algorithmics and Bloomberg Team up To Integrate Trading and Risk

Algorithmics and Bloomberg have formed an alliance to provide pre-integrated trading and risk solutions for users of Bloomberg's Trade Order Management System and Portfolio Trade Order Management System. Initially, Algorithmics will provide its AlgoSuite software and analytical engine to be hosted at Bloomberg for market risk management over the Bloomberg Professional service. In the future, other risk areas including credit risk, collateral risk and risk data management will also be added to the integrated offering.

The integration work is currently underway and the two companies have already enlisted a number of development customers to participate in the Beta phase of the project, with the final product to be available in the middle of this year, says Justin Forrest, director of ASP solutions at Algorithmics. TOMS and PTOMS end users will be able to feed trade and position information directly into the Algorithmics risk engine for risk reports. Those reports will include a variety of market risk analysis options from sensitivity to Value at Risk and benchmark tracking. The reports will then be sent back to the user as an HTML application within the Bloomberg terminal. "It will be a different screen on the terminal and it will look like a Web application," says Forrest.

Bloomberg will implement the Algorithmics software to run on a series of servers within its operational centers, he explains. "All of the infrastructure pieces----from the actual hosting of the risk engine to the production of the mark-to-future cubes everyday, the data that is fed into it, the networking infrastructure, the generation of the HTML and the hosting of the application itself---all happens at Bloomberg," says Forrest.

Whereas current Bloomberg Professional users must export position and trade information into a file, feed it into a separate application and produce the risk analysis reports, now users can automatically feed the information already in the system for more convenient risk reporting from the same application. "One of the big benefits to this is that the integration piece is all done in the background," adds Forrest.

The integrated trading and risk functionality will be available to Bloomberg clients on both the buy and the sell side. The buy side being a newer customer area for Algorithmics, which has traditionally focused more on sell side customers. "This is a way of getting Algorithmics analytics into the buy-side community and into the front office," says Forrest. "On the buy side there's a much bigger audience in terms of hedge funds, mutual funds, asset managers, etc." The integrated Algorithmics functionality will be available on a subscription basis to Bloomberg users.