Market Maker Leverages Sophisticated Technology
Global Trading Systems is a prototypical 21st trading company, combining market smarts with technology to derive a maximum ROI (Return on Innovation), according to co-founder Ari Rubenstein.
Positioned at the intersection of capital markets and technology, GTS labels itself as “an integrated trading and technology firm that combines market expertise developed in the exchange pits with industry-best software and network solutions.”
The parent company, GTS, is an exchange market-maker in thousands of US equities and ETF securities. “Our trading experience across many market regimes and investment in technology help us produce competitive prices for the instruments we trade,” Rubenstein told Markets Media.
The company trades out of regulated vehicles that it owns and operates in the U.S. and Western Europe. “We have exchange memberships on a variety of different markets, across instruments, cash equities, derivatives, foreign exchange, fixed income, rates instruments,” said Rubenstein. “In terms of market share, we have between 3 and 4% market share in U.S. cash equities, between 5 and 10% market share in rates futures, and a growing market share in foreign exchange and other futures in those geographies.”
Through its Strike Technologies division, GTS provides risk management and microwave network products. It recently sold its microwave unit, StrikeNet, to TMX Group. StrikeNet uses microwave towers to connect North American exchange data centers through key Chicago and New Jersey hubs, providing customers with the ability to transmit data at record speeds.
Microwave technology is an efficient and innovative method of delivering critical market data near the speed of light, and at the same time, brings fairness, reliability, and ease-of-use to the increasingly complex modern marketplace, according to Rubenstein.
“It’s a holistically positive technology that democratizes access to a way of moving this critical market information,” he said. “We have a network between Chicago, where the derivatives markets are, and New Jersey, where the cash markets are, in a variety of different instruments, and this will allow an exchange or customers of StrikeNet to move data between those locations.”
Exchanges are now as much about market data businesses and data networks as they are about trading venues. “That’s a big part of their revenue.” Rubenstein said. “They’re forced to make sure that they’re using the best technology so that their clients are going to be utilizing the best possible network and now microwave technology is becoming ubiquitous to accomplish those things.”
The microwave network will be managed by TMX Atrium, TMX Group’s global marketplace infrastructure provider. “We are excited to be offering a broadly-available commercial service that will provide a fast, reliable and cost-effective microwave solution for all market participants,” said Eric Sinclair, president, TMX Datalinx. “The TMX Atrium solution will benefit clients interested in Canada-U.S. cross-border market connectivity.”
The acquisition includes an existing microwave link between key Chicago and New Jersey datacenters. After the transaction closes, TMX Atrium intends to immediately build a microwave route from New Jersey into TMX Group’s primary data center in the Greater Toronto Area, which houses Toronto Stock Exchange, TSX Venture Exchange, TMX Select, Alpha and Montreal Exchange. TMX Atrium currently operates fiber-based connectivity along the same corridors.
“Upon closing of this transaction, TMX is going to be the first major North American exchange to own and operate microwave technology,” said Rubenstein. “It’s a game changer. It’s a milestone that supports our belief that every investor should have equal access to the fastest and most accurate data. Traditionally, these new microwave networks were owned proprietarily by businesses. Now that it’s going to be part of an exchange offering, a regulated vehicle.”
Featured image via mickyso/Dollar Photo Club
New MarketAxess COO says market development is at an early stage.
Tailoring equity-trading strategies to client specifications is a work in progress.
Cantor Fitzgerald cites execution quality, customization, and access to liquidity as trading differentiators.
Market 'electronification' sets the stage for auto-ex, MTS says.
Growing use in developing regions and other asset classes.