patsystems Builds Electronic Interface to Exchange Floors

patsystems, an independent software vendor that has previously specialized in providing front-end access to all-electronic derivatives markets, has launched an open-outcry-oriented trading application dubbed Screen-To-Pit. The application, which has been fully integrated with patsystems' flagship J Trader front-end workstation software, has been built to meet the demands of futures-commission-merchant (FCM) clients that desire the ability to electronically route orders to the floors of various U.S. futures exchanges -- including the Chicago Board of Trade, Chicago Mercantile Exchange and New York Mercantile Exchange.

Stephen Rawls, the recently appointed U.S. general manager of patsystems, says that Screen-To-Pit has already been deployed in support of Rand Financial Services -- a Chicago-based FCM client of the vendor. With the launch of Screen-To-Pit, he says, patsystems' clients can, via a single front end, route orders not only to all-electronic derivatives markets, like Eurex the London International Financial Futures and Options Exchange, but also to open-outcry-driven exchanges like the NYMEX and the CBOT.

Much of the demand for Screen-To-Pit, Rawls says, has come from "traders operating in the traditional agricultural markets." In particular, he says, FCM clients of patsystems are interested in gaining access to agricultural contracts traded in the CBOT's pits. "So the CBOT (was) anxious for us to integrate a technology front-end with its traditional markets," says Rawls.

Sang Lee, an analyst covering e-trading at the research and consulting firm Celent Communications, says that it is likely that there will be sufficient demand for an all-in-one front end that allows traders to route orders to a variety of derivatives markets. "Under the current market conditions, everyone is under pressure (to produce) cost reductions and find the best possible execution .... And if you bypass a couple of intermediaries here and there, obviously that's going to lower your cost of execution," he says.

By launching Screen-To-Pit, patsystems may be able to make a mark in the U.S. derivatives markets before the landscape changes. "It's a good way for them to get into the U.S. before electronic trading finally overtakes the floor-based trading model," says Lee.

Ultimately, the goal of patsystems is to provide its clients with a choice to route orders to whichever market they want, says Jim Froelich, the vendor's executive vice president in charge of product development. From an open outcry perspective, he says, Screen-To-Pit provides clients with flexibility by allowing them to route orders to multiple execution destinations on a floor -- including a broker desk, a floor desk and a pit-based broker using a handheld device. "Screen-To-Pit is a piece that fully integrates the open-outcry markets, wherever you want to send orders to," says Froelich.

Rawls, who says that Screen-To-Pit can also route orders to floor-based printers, took over as U.S. general manager of patsystems on March 6. Before joining the ISC, Rawls worked as the vice president of interactive operations at Hyperfeed Technologies.