On the heels of completing a six-month beta program, Chicago-based Trading Technologies International (TT) said its new multi-broker derivatives trading platform is publicly available today.
Twelve buy side firms have participated in the TT MultiBroker beta program including some of the industry’s largest hedge funds and CTAs.
The platform’s official launch comes after the bankruptcies of several futures commission merchants (FCMs), including Refco, MF Global and Peregrine Financial Group, which is why the buy side is demanding a multi-broker futures solution.
Buy side firms are showing more interest in broker diversification, according to Tom Haldes, TT’s head of buy side technology, who also cited the trend toward consolidating execution management systems as a factor.
“But I think being locked into one sell-side provider is not a good place to be in the rapidly evolving world that we live in today,” said Haldes. “This ushers in a new era of competition for the buy order flow,” he added.
TT first announced the launch of MultiBroker ASP solution on Jan. 30, 2013, with major brokers participating in the beta program including BoFA Merrill Lynch, Credit Suisse, Deutsche Bank, HSBC, J.P. Morgan, Macquarie Bank Limited, Mizuho Securities USA, Morgan Stanley, RBC Capital Markets and UBS.
By connecting traders with more FCMs, firms can chose brokers that specialize in certain markets such as the Far East. “It’s a play for more competition from the service providers, the clearing providers, better financing rates, better research,” Haldes said. A global macro hedge fund shop that wants to put on trades in all the major derivatives markets, will find that not all brokers participate, he said. “It really lets you tailor the configuration of clearers you use to be really optimal for your strategy.”
“The more frictionless you can make a transaction from one clearing broker to another, the better off the end user is. When you are locked into one broker it’s harder to move to another provider and you’re probably not getting the best execution,” said Haldes.
The platform enables traders to seamlessly transition between brokers when routing orders directly to the major futures exchanges through TTNet, the company’s fully managed hosted solution, which delivers fast execution via data centers or hubs located close to major exchanges in Chicago, New Jersey, London, Frankfurt, Sao Paolo, Sydney, Singapore and Tokyo. Through TT’s exchange gateways, clients will have access to futures, options on futures, fixed income, select OTC products and swaps spanning ore than 14,000 different instruments.
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Traders can access the Multibroker ASP solution though TT’s main workstation, X-Trader, which runs as client side software. Another way is through TT’s visual programming platform (ADL), which enables firms to create their own strategies. In addition, TT supports a standard application programming interface (API) as well as a FIX API with the ability to define routing rules and pre-allocate orders to multiple brokers. Execution is on the server side, so if someone creates a strategy, they would request it to run in Singapore, Chicago or London, for example, to get that sub-second execution, illustrated Haldes. “When you put strategies on, those would get deployed in a proximity driven manner to the most suitable venue.”
While there are other broker-neutral platforms on the market, TT claims that some are patched together and are sub-optimal. “There are some providers that have multi-broker solutions but when you look under the hood, you’ll see that in some cases an order is being handed off to a broker network or third party network. “We’ve built a native end-to-end solution that takes out all the hops. There are obvious benefits of speed, reliability and reducing hops,” noted Haldes.
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