Thomson Reuters tackles higher data volumes, market volatility

Financial data provider Thomson Reuters has launched a new direct data feed designed to help market participants handle increased data volumes, market volatility and requirements for low latency.

Thomson Reuters said its Data Feed Direct (RDF-Direct) will deliver consistent performance during peak and forecasted market data volumes for trading venue feed connectivity. The upgraded architecture utilises technologies including multi-core processing to decrease latency and improve system performance. In testing, the solution demonstrated an eight-fold improvement in throughput and a four-fold improvement in latency, Thomson Reuters said. Users will also be ale to access Thomson Reuters proximity hosting services.

Asian electronic trading revenues to decline - TABB

Electronic trading revenues are anticipated to fall in the Asia-Pacific region, while the development of dark pools is expected to stall, according to new research from consultancy TABB Group.

In ‘Asian Equity Trading 2009’, TABB predicts that income from electronic trading will slip 16.9% to $815 million this year, from $981 million in 2008. This follows a similar decrease of 17.7% in institutional value traded in the previous 12 months, a drop that affected overall trading strategies in Asia, according to TABB.

“In the second half of 2008, there was a significant pullback leading into the first quarter of 2009,” said Matt Simon, TABB Group analyst and author of the report. “Traders saw liquidity sink.”

Institutional flow beginning to pick up - Liquidnet

Institutional trading volumes in the public markets may still be languishing, but new figures from independent block crossing network Liquidnet suggest buy-side investors are regaining confidence.

In recent weeks, Liquidnet has seen daily order flow in Europe reach $20 billion, having dropped to $12-14bn in the first quarter. At the same period in 2008, daily volumes were at $30bn. Liquidnet specialises in executing equity orders in large size and its volumes can serve as a proxy for the trading activity of big investment groups that typically buy and sell stock in large blocks.

John Barker, managing director, Liquidnet Europe, acknowledges that, in line with other venues, Liquidnet felt the impact of lower trading volumes across Q4 2008-Q1 2009. But he asserts that there are strong signs that institutions are coming back to the market.

Dark pools at odds with price discovery

Taking liquidity away from the public order book poses a threat to the buy-side’s ability to discover prices, say top investment managers at the TradeTech securities industry conference held in Paris this week.

While brokers are keen to extol the virtues of their internal crossing engines, arguing they provide both price improvement and reduced market impact, some buy-side CEOs are concerned that the proliferation of off-exchange trading will diminish the ability to value assets effectively.

“The existence of places where you can trade without disclosing the quantity, involvement etc. is not a benefit to anyone on the buy-side and puts end-investors in jeopardy,” said Francois Bonnin, CEO of John Locke Investments, during a panel discussion on how the buy-side is adapting to the changing investment environment.

SIX Swiss Exchange shifts to new trading platform

SIX Swiss Exchange has migrated the majority of its participants to its new trading platform, SWXess. The platform, which was launched on 16 February, handles the trading of all securities listed on the exchange, including shares, bonds, exchange-traded funds and securitised derivatives, and offers lower latency and higher capacity than the previous system.

According to SIX Swiss Exchange, SWXess’s “massively increased capacity” allows it to meet the needs of algorithmic traders and requirements for direct market access. The new platform also features standardised interfaces and a choice of connectivity options, allowing participants to tailor their trading links to the exchange.

The core technology for the new platform is fellow exchange group Nasdaq OMX’s X-stream multi-asset-class trading system. It will also use the Exchange Data Publisher solution from NYSE Technologies, the technology division of NYSE Euronext, for real-time market data delivery.

SIX Swiss Exchange shifts to new trading platform

SIX Swiss Exchange has migrated the majority of its participants to its new trading platform, SWXess. The platform, which was launched on 16 February, handles the trading of all securities listed on the exchange, including shares, bonds, exchange-traded funds and securitised derivatives, and offers lower latency and higher capacity than the previous system.

According to SIX Swiss Exchange, SWXess’s “massively increased capacity” allows it to meet the needs of algorithmic traders and requirements for direct market access. The new platform also features standardised interfaces and a choice of connectivity options, allowing participants to tailor their trading links to the exchange.

The core technology for the new platform is fellow exchange group Nasdaq OMX’s X-stream multi-asset-class trading system. It will also use the Exchange Data Publisher solution from NYSE Technologies, the technology division of NYSE Euronext, for real-time market data delivery.

Brokers adapt to buy-side’s ‘broad touch’ needs

Difficult market conditions since the second half of 2008 have accelerated a trend toward a ‘broad touch’ approach to trading, delegates at the TradeTech securities industry conference were told in Paris last week, as clients demand access both to market intelligence from experienced sales traders and electronic execution tools that can identify liquidity in a low-volume climate.

“The death of the high-touch has been greatly exaggerated,” said Andrew Sharpe, partner, sales trading at UK stockbroker Redburn Partners. “Today’s sales trader is connected to the product, the analysts, the decision makers all the way through the chain, but is also technologically savvy and able to navigate through all the different pools of liquidity.”

“In times of high volatility, clients are looking for guidance on where the markets are headed. They don’t want to look foolish 30 minutes after a trade, so are increasingly using participatory algorithms. But clients still value the input of the sales brokers. Voice brokers won’t go away; the ones that remain will be the best of the best,” said Bill Cronin, managing director, US broker Knight Equity Markets.

Russian securities firm installs Orc trading tools

Russian securities firm Maxwell Capital has implemented market connectivity and trade execution solutions from trading technology provider Orc Software.

Maxwell Capital will use Orc Trader, the firm’s front-end trading application, to link to Russia’s domestic markets, RTS, FORTS and MICEX, as well as international markets.

In addition, Maxwell Capital plans to use Orc solutions to offer DMA trading to its private and institutional clients and for establishing FIX connectivity to international markets.

“Our traders have very positive experiences from previously using Orc and their views added to our conclusion that Orc provides the best available electronic trading and connectivity solution for our needs,” said Alexander Svintsov, managing director, Maxwell Capital Investment Company, in a statement.

ULLINK cuts DMA platform latency

ULLINK, a global connectivity provider, has reported that its UL BRIDGE V3 direct market access (DMA) platform has reached a top speed of 45 microseconds per order.

ULLINK’s tests incorporated full decoding, normalising, routing and encoding of FIX messages and attained average speeds of 113 microseconds per order.

"We are further optimising our processes to reach ULLINK's target performance of sub-100 microsecond average speeds before mid-2009." said George Gomes, CTO of ULLINK, in a statement.

US execution venues offer cheaper trading

Two US trading venues, equities platform Direct Edge and options exchange International Securities Exchange (ISE) – which owns 31.54% of Direct Edge – will introduce new fee schedules on 1 May that offer more attractive pricing.

Direct Edge will increase the rebate for posting liquidity on its EDGX trading platform for “Super Tier” customers to $0.003 from $0.0029 while leaving the change for taking liquidity unchanged at 0.0026.

Users qualify for Direct Edge’s Super Tier if on a daily basis they either: add 40 million shares to either of the EDGX or EDGA trading platforms or both combined; add 20 million shares to either or both platforms and route 20 million shares or more through EDGA; or add 10 million shares or more to EDGX, as long as added liquidity on the platform is at least 5 million shares greater than the previous calendar month.

Tethys adds new options features to EMS

Trading software and analytics provider Tethys Technology has added a new module for options auto-quoting and centralised, risk-managed trading to its Execta execution management system (EMS).

According to Tethys, the module allows users to take advantage of market opportunities instantaneously in an automated fashion and manage risk on large portfolios of options.

“Increasing market data rates and fast-moving, fragmented markets have made managing options orders and hedges a significant challenge. Execta options spread trading and auto-quote strategies allow managers and traders to automate this process to improve execution performance and lower risk”, said Nitin Gambhir, CEO of Tethys in a statement. “In addition, our options portfolio module provides the ability to monitor all the greeks and trade vega and delta exposures in a unique manner that enhances execution efficiency and reduces risk.”

Deutsche Börse reinforces Japanese derivatives, market data business

International exchange group Deutsche Börse has opened a representative office in Tokyo to provide a local hub for Eurex, its derivatives exchange, and its Market Data & Analytics unit.

“The new presence in Japan will significantly improve our local customer service and foster our direct relations with Japanese market participants,” said Michael Peters, responsible for the Asian business expansion of Deutsche Börse and member of the Eurex Executive Board. “It is also a sign of our strong commitment to the most important financial centre in Asia, in which close relationships with key institutions have already been established.”

Ex-JPM trader to head ITG’S US portfolio business

Agency brokerage and trading technology provider ITG has appointed John Carillo as its new head of US portfolio trading.

Carillo, who was previously a senior sales trader at J.P. Morgan Securities in charge of marketing and trading global portfolios for institutional equity clients, will be responsible for all aspects of ITG’s portfolio trading services, including executing portfolios on behalf of all US clients and offering strategic counsel and expertise for complex portfolio transactions.

Before joining J.P. Morgan Securities in 2002, Carillo also held a senior sales trader position at Merrill Lynch, where he provided institutional clients with agency and risk-based portfolio execution and analysis.

“With the addition of John’s experience and vision to ITG’s agency offering, we can offer an enhanced high-touch portfolio trading service that will be extremely beneficial to our clients,” said Chris Heckman, managing director at ITG, in a statement.

Trading revives in European equity market

European equity trading activity showed signs of stabilising in March, with turnover increasing by 11% from February to just over €1.1 trillion, according to the latest market share report from Thomson Reuters, which includes delayed trades for the first time.

Volume also increased 20% month-on-month to just over 190 million shares. However, turnover for March represents a 39.5% year-on-year decline, suggesting there is still a long way to go before a significant recovery is realised.

The market share of multilateral trading facilities (MTF) also fell, accounting for 7.73% of total European trading in March compared with 8.1% in February. The decline may in part be due to the expiration of the market-making agreements between Turquoise and its shareholder banks on 13 March.

Crisis pinches Spanish exchange profits

Bolsas y Mercados Españoles (BME), the group that operates all Spain’s domestic stock exchanges, has reported a 39.5% fall in first-quarter net profit to €33.5 million on the back of reduced trading volumes. The company cited “severe uncertainty gripping markets” as the main contributor to the trading slump.

Revenues from the firm’s equities division declined 37.3% in Q1 to €28.7 million, and share volume traded slumped to 27.12 billion shares, a 17.6% decline compared with Q1 2008.

Quarter-by-quarter revenues were also down 38% for clearing and settlement services to €12.5 million and 11.8% for derivatives to €6.5 million, despite a 39.9% increase in volume in futures and options contracts.