04.18.2013
By Terry Flanagan

Data Feeds Combine With Low-Latency Bandwidth

New data feeds are being rolled out on an ongoing basis to satisfy customer demand, and the bandwidth needed to carry them is growing as well.

NYSE Technologes’ new consolidated feed for Level 1 market data, NYSE BQT (Best Quote & Trades), provides a real-time, unified view of BBO (Best Bid and Offer) information for NYSE Euronext’s three U.S. equities exchanges (NYSE, NYSE Arca, and NYSE MKT), including Nasdaq issues traded on NYSE Arca and NYSE MKT.

The feed is a more flexible and affordable alternative to other Level 1 market data offerings.

“Firms are faced with the high cost of Level 1 data products, that is, top of book data, namely best quotes and executed trades,” said Todd Watkins, vice president of global market data at NYSE Technologies. “There is a demand for faster, lower-cost alternatives that provide high quality, comprehensive data coverage in a real-time, unified view.”

The raw data feed, which is delivered via the NYSE Technologies Secure Financial Transaction Infrastructure (SFTI) network, can be distributed to a diverse number of investor applications such as retail blotter interfaces, charting and research tools, symbol watch lists, and portfolio management software.

“It can provide market data managers, financial advisors and investment managers access to the most important market information at a much lower cost,” said Watkins.

Networking companies are building out capacity, including microwave, to transmit market data in support of low latency, sub-second connections.

Custom Connect, a provider of carrier-neutral network infrastructure, launched its microwave offering in the last quarter of 2012, and the first users have been up and running for several weeks now.

The first connection connects two key financial markets, NYSE Euronext in Basildon and Equinix in Frankfurt. This direct connection reduces the latency with 40%, allowing financial firms with trade/matching engines in the NYSE Basildon data center to trade faster to both markets.

“High frequency trading is now the norm in equities and derivatives, other asset classes, as foreign exchange and fixed income rapidly grow, NYSE Euronext has given high speed trading firms choice over how they connect to these markets,” said Olav van Doorn, executive director at Custom Connect. “The current latency is only the start of an ongoing process to optimize this service with the best possible path and equipment.”

The connection is designed around thorough site surveys and feasibility studies in order to guarantee the lowest latency level and best uptime under all conditions. With the proved latency the performance is increased to 40% compared to current connections on fiber in combination with a benchmark in availability of 99.50%, according to Custom Connect.

Custom Connect has several projects underway to connect all the leading European financial Exchanges with microwave low-latency connectivity.

Access to Level 1 market data is high through existing U.S. Level 1 offerings, averaging $600,000 a month at the enterprise level. By providing a unified view of Best Bid/Offer and Last Sale information for the entire NYSE Group NYS, BQT saves clients up to 45% of annual cost spend in Level 1 data.

“For a retail brokerage firm with 10,000 employees designated as professional wealth managers and back office personnel, taking the NYSE BQT feed means access to very high quality top of book data at a fraction of the cost of other products,” Watkins said. “NYSE Technologies will charge the firm $18 per user looking at the data from CTA who charges $64 per user. That’s a quick monthly savings of $460,000.”

For example, firms with 5,000 to 9,999 users can save up to $500,000 a month with NYSE BQT when compared to data from the Consolidated Tape Association (CTA).

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