Ever since last fall's market turmoil trimmed many investment managers' performance figures, the pressure to reduce costs has escalated. This puts many second-tier market data vendors under the microscope of cost-conscious investment managers. Rather than having to build and maintain an expensive proprietary data network, now there is an effective transmission medium available for a limited cost. Even a vendor such as CQG, which has been delivering data via satellite and leased line for nearly 20 years and with a long-standing customer base in futures, has seen the writing on the wall.
"Satellite gave us the ability to deliver data to customers where a leased line was simply not viable," says Simon Haslam, director of CQG in Paris. "Now, with the Internet we have another revolution in data transmission, which makes a data service just as effective in Woolagong as it is on Wall Street. Internet technology is advancing at such a pace, that within the foreseeable future we see it becoming the medium of choice even for city-based organizations."
Last year, CQG began phasing in CQG LAN. As of press time it was in the final stages of testing its Internet feed - CQG Net. And over the past few years the company has been rapidly expanding its coverage and scope by adding equities and fixed-income securities.
Other vendors see the process as already well advanced. For instance, Data Broadcasting Corp. , whose Signal product has been one of the most popular real-time feeds used by individuals and independent traders, is also making the switch to Internet delivery for the professional market.
"Today's investment managers are rapidly abandoning traditional leased lines and satellite now that the Internet has gained such widespread acceptance as a robust delivery system," says David Stuart, managing director of DBC for Europe. "Utilizing these advantages allows investors to benefit from the extraordinary power and flexibility of the latest developments in Internet and browser technologies." While the vast majority of Signal's 28,000 subscribers are satellite users, it now has 7,700 online customers, of which 700 to 800 are users of its new professional Internet product.
Last April, DBC, together with its Capital Management Sciences (CMS) division, launched DBC/CMS InSite, a windows-based news and market information service. For sites with less than 25 users, InSite is available in standalone format only.
dbc insite capital markets
InSite Capital Markets is at the top of the InSite range and provides data for equity, fixed income and forex. Installation consists of a five-minute software download from the DBC site. The InSite application automatically starts the DBC Data Manager application, which establishes the Internet connection to the DBC data servers. Apart from data communications, the Data Manager is also used to select the symbols to collect data. There are some practical features, that keep the amount of scrolling and clicking to a minimum, such as "globals" - securities grouped together by exchange or type. To avoid unnecessary data collection, set an identical "permissions" password in both the Data Manager and InSite. Deleting a symbol from a quote window in the latter will automatically delete it from the data collection list in the former. Though this is a sensible feature it needs to be treated with some circumspection, since it is set up to do this by default.
InSite comes with a sensible selection of pre-configured screen layouts, which include a market overview as well as more specialized areas such as future, options and forex. The pre-configured screens and other functions are accessed via a floating tool bar. A user can add various types of display windows to a screen layout. Five of the six display windows (Quote, Detail, Ticker, Portfolio and Chart) will be familiar to existing DBC Signal users, while the sixth (Nasdaq Level II) will not.
The Quote windows are intuitive and easy to configure. It allows users to add, delete, replace and format the alignment of column headings or choose a preformatted column heading appropriate to particular securities. Right clicking on a symbol brings up a menu that allows you to set up alerts or access a tick, interval or daily chart of a particular security. A nice time-saving touch in the Quote window is auto listing. Rather than having to key-in numerous option symbol or contract month codes, the software automatically identifies all active option series or contract months for the underlying instrument(s) of your choice and displays them.
Although the range of fields that can be displayed in the standard Quote windows is extensive, a separate detail window can be opened for any instrument.
InSite provides charting in two separate ways. Tick and intraday interval charts are produced using tick data stored locally on the hard drive, while daily charts are built from data downloaded via an Internet connection from a DBC data server. (Daily charts were not enabled on the review copy.) Intraday charting is quite basic: a user can have the price, the volume and a moving average.
The daily data charting facilities seemed much better. There is a respectable range of the more common technical indicators, including Bollinger Bands, linear regression, on balance volume, stochastics and MACD.
Unfortunately, for both tick and daily data charting, there was no scroll bar, so navigating through longer data files was tedious.
The Nasdaq Level II window is well laid out and intuitive to use. Apart from the basic Level I quote at the top of the screen, it allows the user to rank the market makers' quotes in the main body of the window by Best Market, Best Bid, Best Ask or Alphabet. An optional panel to the right of the window shows trade time, price and size.
In addition to the pre-configured screens, the InSite toolbar provides direct links to CMS Web pages for additional news and data.
The Bond Markets page is excellent. A tabbed display provides real-time pricing on a huge range of treasuries, MBS and money market rates. The InfoCenter pages include detailed commentary and reports on global markets, a news search engine, quick quotes, symbol search and online technical charts. The research pages provide analysts recommendations, fundamental data, yield histories and insider trading reports. The What's New page is a run-down on the latest and forthcoming InSite features and contains detailed help for major program functions.
With a program that owes much to CMS's BondEdge product, InSite is solid on fixed-income analytics, which are available via its Bond Analytics program. Analytics available include present value, horizon return and swap analysis. A Search function allows users to specify a detailed range of bond characteristics and search the database for securities that meet those criteria. In addition charts of 10-day or long-term yield history for any bond in the database, can be displayed. An extra cost option is the Portfolio function, which allows multiple bond portfolios to be maintained and revalued as required. Bond Analytics had an odd glitch: the quick search function window included a command button, called Model, which wasn't covered in the help files, and clicking it caused the program to crash.