Looking to shake up the status quo, San Francisco-based Marketcetera is developing an open source platform for automated trading systems with feedback from a community of buy-side users.
Similar to the way the Linux operating system was developed by a community of software programmers, Marketcetera is drawing upon the methods of open source development to create a framework for building automated trading systems.
The first version of the Marketcetera Trading Platform will allow firms to build automated trading systems for equities, equity options and currencies. The company has about five paying customers mainly on the buy-side using the platform- including hedge funds and proprietary trading shops. Customers who pay for the product receive the full platform along with support and maintenance.
"It's all buy-side institutions who are looking to generate alpha or in some cases to control risk and costs in large trading blocks of stocks," says Graham Miller CEO of Marketcetera.
The end-user platform is called Photon and is analogous to a next-generation EMS, says Miller. "It's not just sending one-off orders. It's pulling in market data, running calculations or suggesting trades, generating orders and sending them down to an exchange. It's an end-user development environment for automated trading systems," he says.
The early partners are members of its design partner program. They paid between $10,000 and $20,000 for the ability to participate in product development, installation and get some integration help along the way, notes Miller.
Marketcetera also has hundreds of non-paying "community members," says Graham. They can download the source code, download a complete build of the platform, receive bug reports and documentation and join the vendor's mailing list and participate in discussion forums. Going forward, the software maker will pursue a commercial license option if hedge funds, for instance, want customer support and maintenance.