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Direct Edge Launches Connectivity To Other Equity Markets

The fourth largest US exchange operator is jumping into the connectivity business with Connect Edge as a way to lower telco costs for sell side customers.

Direct Exchange, the fourth largest U.S. stock exchange operator, is launching a suite of connectivity services to provide a one-stop shop for access to market data feeds and direct market access to all major exchanges.

Through the new service, Connect Edge, brokerage customers would use their existing connection to Direct Edge to get market data or send orders to existing markets as well, says Kevin Carrai, head of connectivity services at Direct Edge, in an interview. Carrai was brought on board in April to spearhead the service from Nasdaq OMX where he was head of Nasdaq Access Service, including collocation, for the past eight years.

This marks Direct Edge’s first foray into providing technology services, which has become a revenue source for competitors such as NYSE Euronext’s NYSE Technologies and Nasdaq OMX. “It is Direct Edge’s move into other areas into which we can provide value. We see it as obtaining additional revenue,” says Carrai.

However, Direct Edge has made the strategic decision not to get into the collocation space. “We’ve got some great partners in Equinix and Telx. What we want to do is provide other value added services like connectivity,” says Carrai, who adds, “We’re not interested in operating cabinets and power.”

The key advantages of the Connect Edge service over other connectivity services are lower telco costs, fast access, burst protection and no long-term commitments, according to today’s announcement. Direct Edge says customers can lower their infrastructure costs because they can eliminate their individual telco connections to other markets and make Direct Edge their primary source for market connectivity. “The way it works, they have a connection to us — a physical circuit connection to us — and depending on what they choose to do, we provide them with this service to that particular market,” explains Carrai in the interview.

Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio

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