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Home Finance What is mission-critical for trading success?
Finance

What is mission-critical for trading success?

by Jessica Weisman-Pitts

What is mission-critical for trading success?

By Jeff Mezger, Vice President of Product Management, TNS Financial Markets

People remain mission-critical to trading success. Senior management define strategies to be executed, all of which depend on effective trading infrastructure. This requires significant investment to ensure the teams running this trading infrastructure have the necessary skillsets. Often firms find working with a managed services provider is more efficient and effective than going it alone. This is because this outsourced route typically enhances agility and reduces overall total cost of ownership (TCO). 

It is also critical to work with a provider who can offer scalable solutions to accommodate the demands of ever-expanding bandwidth. A managed solution that provides both access to, and distribution of, vast amounts of raw market data is of equal importance. As traders enter the market, become successful, and diversify their portfolios, their market data needs can place excessive network capacity pressures on their infrastructure. Therefore, a managed service provider must be able to accommodate and handle sudden data bursts during high-activity periods.

TNS is the only Infrastructure-as-a-Service (IaaS) provider to combine a vendor-neutral approach to market data application management, alongside end-to-end hosting, market data and consulting services specifically for the financial markets industry. The company combines into one stack, connectivity, monitoring and consulting to traders and financial services vendors worldwide. 

How can financial traders’ best access and utilise technology?

Systematic trading requires access to the fastest infrastructure and environments closest to where the trade is physically taking place within the relevant data centre. Processing close to the source of the input data provides the lowest possible latency between input and response – and speed matters.

Successful systematic traders use advanced data analytics to inform trading decisions through price formation, trading signals and liquidity insights, whilst leveraging the latest technology developments to gain a performance edge in their execution strategies. Algorithmic trading provides enhanced insight and complex quantitative trading strategies that improve trading efficiency and enhance execution capabilities by reducing market impact. 

What about Cloud?

Another key consideration for financial firms is cloud computing adoption. Traditional financial trading firms, from exchanges and data vendors, to brokers, hedge funds, and even proprietary trading firms, are now embracing cloud computing. Cloud remains the go-to for FinTech start-ups, driving innovation in financial markets. The cost benefits of the cloud for low latency trading and execution are clear. It significantly reduces upfront costs of setting up infrastructure. The lower costs of scalable ‘pay-as-you-go’ models allow smaller organisations to leverage robust security and infrastructural elements, established by powerful hosting providers, while themselves remaining agile. 

Firms need a clear strategy for cloud implementation. Public clouds can be cost effective to put data in and keep it there, however, taking data out is expensive. Public cloud environments are great for big data analysis and help financial firms store, move, and manage large amounts of data. It is also good for transferring large volumes of data between regions, like London and New York. 

Cost savings and economies of scale continue to be front of mind for many firms and can often be difficult to achieve when going it alone. TNS has expanded its capability to help clients to reduce cost and complexity across every element of trading infrastructure spend and support, including market data middleware, application, and commercial management. With infrastructure and cloud expertise, TNS offers clients a single-point-of-contact coverage for all trading and market data infrastructure needs globally.

Jeff Mezger is Vice President of Product Management at TNS with responsibility for its managed services for the financial industry. He oversees product development and strategy for market data, online and data centre services. 

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