10.10.2011
By Terry Flanagan

Exchanges Diversify Operations

Direct Edge becomes the latest exchange operator to expand outside its core business of matching orders and conducting trades.

The Jersey City, N.J.-based dual exchange operator has announced that it has co-developed a new cloud service for historical trade and quote data along with service provider Xignite.

“Direct Edge is looking to be the full resource for historical market data, that’s our objective,” said Kevin Carrai, head of member and connectivity services at Direct Edge. We know it’s of great interest for our customers. What this does for Direct Edge, it allows us to provide historical data. Many exchanges can provide a replay, but what this allows us to do is allow our customers to customize what they want to receive, so not only can they get a replay of the day’s trading, but it allows them to do more with the data that we’ve got.”

“This is the fastest, easiest, most convenient way to get historical data in their systems, regardless of what it may be,” said Chas Cooper, vice president of product management at Xignite. Customers can slice and dice the data, and get exactly what they want. Our entire business is on-demand market data. Just the data you want, just when you need it. You pay for what you use.”

Exchanges have needed to adjust to an ever-changing environment, with some adapting better and quicker than others. There is increasing sentiment in the industry that the business of running an exchange and matching orders has reached a wall – what was once a lucrative operation has become somewhat commoditized.

NYSE Euronext has taken the approach of spinning off all of its technology operations into NYSE Technologies, which is now estimated to be a billion dollar business. It is providing and running trading technology and infrastructure, in some cases even for competing venues. The Australian Stock Exchange has also done something similar, in growing its technology business. It has recently introduced a co-location center and offers smart order routing technology for its members, as it prepares for the introduction of Chi-X in its market.

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