Trading Technologies (TT)--an independent software vendor that has built workstation software gateways to a host of derivatives exchanges-has rolled out a new, graphical user interface (GUI), dubbed MD Trader.
Launched last week, the GUI has already been integrated with a pair of TT's front-end workstation products: X Trader and X Trader Mercury. MD Trader is expected to improve price transparency and enhance trade executions for clients who use those systems.
Harris Brumfield, a Chicago-based proprietary trader who played in instrumental role in developing MD Trader, says several Wall Street firms have already expressed an interest in using the GUI. In fact, he says, the world's "second-largest investment bank" has already gone live with MD Trader in support of its derivatives traders. However, while noting that the GUI is an "add-on" service that is being offered to clients of X Trader at no extra charge, Brumfield declines to specify that bank.
X Trader, TT's flagship front-end workstation, has already been installed on the trading desks of firms like J.P. Morgan, Bear Stearns and Prudential Securities. Meanwhile, X Trader Mercury--a modified version of X Trader that is scheduled to go live in November--is being targeted at high-end proprietary traders.
Brumfield, who holds no official title at TT but does own a stake in the company, says the MD Trader GUI will "sit on top of" X Trader (and X Trader Mercury, following its launch), offering users of the front end an electronic tool for both accessing bids and offers, as well as executing trades.
One feature that sets MD Trader apart from other GUIs, says Brumfield, is its ability to display bids and offers in a "static" format. In addition to giving clients a better feel for the ebb and flow of the market, the static feature allows traders to enter bids and offers at the exact prices they desire. As a result of that feature, Brumfield says, users of MD Trader stand a much better chance of getting their trades filled at their desired prices than users of ordinary GUIs, which display bids and offers on a rotating basis.
"When you have a rotating market, as prices rotate, a lot of the times when you go to send one price, everybody goes after that price at the same time. And if somebody happens to beat you by a millisecond, your order gets filled in at the next price," says Brumfield. And, unfortunately, he says, that next price is often up to "eight ticks away" from the price the trader entered.
MD Trader is being targeted at a wide spectrum of traders-from semi-active to hyper-active-who trade stocks and derivatives. While noting that the system will definitely provide benefits to traders who route "10 orders a day," Brumfield says he expects the GUI to have great appeal to proprietary traders who rack up big volumes. "The more orders you do, the more the system benefits you," he says.
In fact, part of the reason Brumfield helped create the trading GUI was so that he could fulfill his own massive trade execution needs. "In three or fours, I may trade between 120,000 and 130,000 derivatives contracts....and since I was processing so much volume, I had to come up with a better way to do that," explains Brumfield. Consequently, he says, MD Trader has been designed to execute huge trades in "nano-seconds."
Today, via an X Trader front-end gateway, clients of TT can get electronic access to the trading engines used by Eurex, the Chicago Board of Trade, the Chicago Mercantile Exchange, the London International Financial Futures and Options Exchange and the Matif/Monep (the French futures and options markets). In addition, X Trader clients can currently tap into Xetra, the German stock market's trading system.
What's more, by November, TT expects to roll out interfaces to the two largest U.S. Stock markets (the NYSE and Nasdaq) and the two biggest electronic communications networks (Instinet Corp. and Island). After those links are built, TT will offer clients the ability to both access a wide variety of markets and trade an eclectic mix of stock and derivatives instruments via a single trading screen.