01.25.2012

Silos Impede Data Flow

01.25.2012
Terry Flanagan

Islands of automation complicate the task of distributing information in real time.

The presence of silos, or buckets of asset classes, complicates the task of managing the ever-growing streams of real-time data flowing through markets.

“From an operational perspective these silos may continue to persist,” Phil Lynch, CEO of Asset Control, a provider of data management technology, told Markets Media. “For example, the fixed income guy will always be the fixed income guy and that is not likely to change. But, this must be appropriately balanced with the need for firms to take a consolidated view across asset classes, regions and business units.”

These silos tend to develop not organically, but rather around specific business initiatives, such as an investment firm deciding to launch a new trading division.

“Firms tend to build systems around assumptions of how particular asset classes work,” Jeff Wells, vice president of product marketing at Exegy, told Markets Media. “While on the surface such systems appear similar, the differences are in fact quote substantial, especially when you’re building systems around data.”

Commodities, for example, trade 24 hours a day, while equities tend to be constrained by daily exchange hours (e.g., 9:30 to 4:00 in the United States). “In a market that trades continuously throughout the day, there are problems with defining the beginning and end of day, which affects scheduling of maintenance and operations,” said Wells.

Exegy provides a “ticker plant”—hardware and software–that provides access to over 100 feed handles from exchanges around the world.

“Exegy provides high-performance hardware that’s accelerated for treating streams of market data from exchanges,” Wells said.

Customers rent Exegy’s ticker plants and co-locate them at trade matching engines of exchanges. “Typical customers are hedge funds, broker-dealers. And exchanges, all of whom are required to bring in market data as quickly as possible,” said Wells.

Anything that impedes the flow of data, including silos, acts as a brake on the ability of the firm to react to changes in market conditions.

“The best prices are only available for fleeting moments, and it’s critical to see best prices quickly in order to execute profitable trading strategies,” said Wells.

Related articles

  1. Deutsche Borse-LSE Merger in Focus

    Instinet Fox River Quant Solution will initially be rolled out in the Americas.

  2. Algos, Post-Trade Top FCM Concerns

    Instinet's Anushree Laturkar says investing in research and analysis is key to improving client outcomes.

  3. The new platform launched via a partnership with BestEx Research.

  4. It is the first liquidity-seeking algorithm on Atlas, the equities trading platform introduced in 2019.

  5. Algorithms in Focus

    Strategy Studio allows brokers to create their own execution platforms.