In the trading technology world lower latency will always be welcomed, but everyone’s attention is now on a different topic—accessibility.
John Yoo, product manager of automated trading at Trading Technologies, demonstrates exactly what this means by firing up Algo Design Lab (ADL), which allows traders to visually create strategies. A series of color-coded lines and shapes on a grid represent a trading strategy that can be executed immediately (see “Next gen stuff,” below). This is very different from hiring a developer to code a strategy that could take months. “The time from idea to delivery is very short,” Yoo says.
TT is launching a new platform that will allow traders to visually draw out algorithms from the comfort of their Web browser. While ADL is a few years old already, the ability to launch it from the Web is a new feature. “If you’ve got a Web browser, you can have access to cutting-edge technology,” says TT CEO Rick Lane.
TT’s new platform, which may be launched as early as the first half of 2015, consolidates all of the technology that the firm has developed during the past several years. It offers an interface, which aims to be as user-friendly and accessible as possible. Nothing needs to be downloaded or installed. To accomplish this, TT had to re-code its entire platform, ensuring that they would not compromise the effectiveness of the technology for accessibility.
TT is not the only firm that is focusing on making their technologies more accessible. “Every technology provider is trying to make their technology more accessible,” Lane says. To remain relevant in the industry, firms are required to start thinking about user experience.
New trading experience
Sanjib Sahoo, chief information officer of tradeMONSTER, says, “Technology should be used to build a seamless customer experience.” This may include introducing responsive design and even predicting what tools the user may need.
This is where trending technologies such as big data can come in. Using analytics, firms can segment their user base and create customized tools for each segment. “If you understand your customer segment, you can create a customized [user interface] specifically for that customer if you know their behavior,” he says.
Sahoo warns that while a flashy interface may attract new customers, it is not the determining factor in assessing the quality of a platform. “Change should focus not on just technology, but should create real value for the customer,” he argues. “If it is not performing, it will not be valuable to the customer.”
The trend toward greater connectivity will also prove to be a challenge for technology firms, as more professional traders demand access to their portfolios on mobile devices.
“We’re connected with so many devices, what’s happening in consumer trends is driving how traders are connected to their portfolio,” Sahoo says. Just a few years ago, no one expected trading to go mobile. Now, mobile functionality is a necessity for trading platforms. “Real-time access, anywhere, any time” is what technology firms should be aiming for, says Sahoo.
TT has already moved into the connectivity trend. “Everybody’s going mobile,” says Stefani Sandow, product manager of user experience at TT. “Everybody demands this online-anywhere accessibility from the tools they use at work.” Being able to use the trading platforms from a tablet or mobile phone while in a remote hotel room or on a train, for example, is the new standard, and not just for retail traders.
Another company working to improve services for traders is Wolverine Execution Services, which launched WEX Vega Trader, a new trading applet that allows users to specify a target amount of vega to execute across a range of option expirations and strikes. Vega Trader helps traders manage risk by allowing them to efficiently take volatility positions.
“With our extensive background and knowledge of options and volatility trading, we built Vega Trader to meet the growing demand from clients for more sophisticated tools for volatility strategies,” said Kevin Kernan, Director of WEX Product Development. “Vega Trader expands our volatility and hedging product suite to allow for lists of options to be traded, monitored, and hedged through one simple mechanism.”
In addition, new technologies may improve the efficiency of trading. Thomas Rollinger, managing partner at Red Rock Capital, has witnessed this evolution. Years ago, he was surprised to find a CTA that employed traders who still called in orders with a land line. “I learned at an early stage in my career that sophisticated software could, in some cases, replace a room full of six to eight people,” he says.
The move towards electronic trading and the use of algorithms, as well as the general democratization of technology, have helped the market become more efficient during a shorter timeframe. No longer is an engineering background needed to construct a trading strategy.
“You’re going to see the cost of technology dropping, which is going to make it more accessible to the segments of the market that don’t have the resources to pay professionally,” Lane says.
Yet with such power at everyone’s fingertips comes a cause for concern.