From the April 01, 2012 issue of Futures Magazine • Subscribe!

Software Review: OptionsCity Freeway

Addressing Time-to-Market for the Professional Algorithmic Trader

imageOptionsCity Freeway 

Contact Info:
Patrick Gardner, Customer Sales and Support
OptionsCity Software, Inc.
200 W. Adams, Suite 1010
Chicago, IL 60606
Office: (312) 635-2719; Mobile: (312) 662-8975

Greater bandwidth and low latency access to the world’s electronic exchanges, along with inexpensive high-speed computing and internet connectivity, are expanding the world of algorithmic high-frequency trading. The media report that more than 70% of all transactions are computer-generated. Average trade size keeps falling and trade frequencies increase. Profit target limit orders may be down to a few ticks. It’s a nuclear arms race of computer hardware and software led by a firestorm of technical trading activity. Such is the endgame of the current generation of sophisticated networked computers applied to the financial markets.

For the small- to medium-size professional trading firm, the question is, “How do we stay up on the electronic trading revolution?” Or, perhaps even more basically, “How to participate at all?” Historically, when computer and information technology advances might at first slow the adoption of new applications and users, infrastructure products would emerge to lower the bar to entry. The world of algorithmic trading is no different, and the team at OptionsCity now offers a set of solutions with their new Freeway product to address the high cost of entry to algorithmic trading. The Freeway product offers key infrastructure for the professional trading firm wishing to participate in the highly competitive world of algorithmic trading. In the end, it’s really all about time-to-market: How quickly (inexpensively) can a trading firm get its trade strategies up and running? That’s exactly what the OptionsCity Freeway product addresses.

The Freeway product offers a two-pronged standards-based solution: First, a desktop environment for developing trade strategy algorithms, and second, an exchange co-location server for strategy execution. As with any technical solution, the devil lies in the details. In this reviewer’s opinion, the Freeway product has made wise design and implementation decisions based on well-recognized internet standards, and then adding the necessary support to address the high-performance demands of today’s algorithmic trading.

The strategy developer makes use of the industry-standard Eclipse Java programming environment (or equivalent) to develop trading algorithms. In this environment, the Freeway product offers a large number of interfaces, or APIs (Application Programming Interfaces), specifically designed for trade development. These mask the details of exchange data, order book, order entry and routing, and position management within a Java framework. This is a programming environment that the professional Internet programmer can work with comfortably.

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