Trading Vendors Tout Speed and Integration for Fragmented Markets

With the trend toward electronic-equities trading and customers coping with fragmented liquidity pools, technology vendors are emphasizing the speed of market data updates and workstations that integrate news, market data, indications of interest and execution venues. Yesterday, Reuters announced the ability to update trading applications through the Reuters Market Data System (RMDS) in less than a millisecond.

At this year's show, everyone is talking about latency, says Philip Lynch, chief executive officer, Reuters America, who says, "The need for speed is a critical change. We're looking at it intensely over the last 18 months."

The trend toward automated trading of equities and options that trade on multiple exchanges has created no tolerance for latency. "People need a system to pull all of this together," says Lynch.

RMDS -- which manages financial content in real time across the client's enterprise -- can supply data to a single application at over 170,000 updates per second, according to the company.

In laboratory tests, the delay between the entry of data into RMDS and its arrival within an application was less than a millisecond, under trading loads that are typical of U.S. equity and options markets, Reuters contends.

Lynch says the speed breakthrough is in response to customers needing direct access to exchange feeds through RMDS. They want to aggregate multiple feeds down one pipe and (they want) low latency to exchanges, he adds.

To help traders make decisions faster, Savvy Soft, a developer of derivatives analytics, released TurboExcel, to run Excel spreadsheets in six seconds, as compared to 15 minutes (the previous rate), which is 300 times faster than the previous rate. According to Rich Tanenbaum, founder of SavvySoft, this allows quantitative analysts or traders to take a model they've developed inside an Excel spreadsheet and move it to a trading system without programming. TurboExcel converts the spreadsheet model into C or C++ code, which are considered the fastest programs for trading.

Meanwhile, Richard Zdrojeski, a technical officer with UBS Wealth Management, was scouting for improvements to applications on the trading floor. One of his concerns is making sure that UBS can integrate it with its desktop. "We have to make sure there's interoperability with our applications," says Zdrojeski.

He says he's interested in market-data infrastructure and documentation storage, noting that traders have to store e-mails for seven years. He's also planning to stop at Matrox Graphics, which makes video cards for multi-screen desktops. But another reason why the UBS technical officer attends SIA is to find out about "bugs and fixes," noting that when there are problems, he can come to SIA to confront the vendors. "When you're in front of them, they have to deal with you," he says.

Zdrojeski says he plans on stopping at Reuters and Thomson Financial's booths to find out what they're offering before the firm's traders do -- because they will want to have it on their desks tomorrow.

Archrivals Reuters and Thomson Financial both unveiled workstation products that offer customized integration of news, data, charting, analytics and charts. Reuters brought out Reuters Station, a new customizable workstation aimed at buy- and sell-side institutional traders, which integrates acquisitions including Bridge, Multex, Stock Val and Lipper, as well as Instinet research and trading tools. "It'll be game-changing for the buy side," comments Michael Steinharter, executive vice president, sales and account management, Reuters America.

Traders on the buy-side, for instance, can pick the components they want, such as time and sales information, technical charting, and volume weighted average price (VWAP), as well as indications of interest and trade advertisements. Reuters Messaging is integrated into the workstation so that someone could send an instant message to a broker to request a price and then call up an order ticket to execute the trade.

Thomson unveiled the integration of Thomson AutEx, its flagship indications of interest and trade advertisements, into Thomson Equity ONE. Sell-side traders use AutEx to broadcast to the buy side all of the equities they are working. From a common dashboard, an institutional trader can set up news, market data, research, trade analytics and charts. "The idea of integrating AutEx with market data [is that someone] can get my Level II and get my Open Book on NYSE stocks," says Michael Raines, special regional manager at Thomson Financial.

Buy-side traders that have order-management systems, such as Moxy, Charles River, Latent Zero and LongView Trading, among others, can use them to execute the order. If they don't have an OMS, Thomson has integrated various destinations, such as Pipeline and Lava Trading, into Thomson ONE. Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio