Navigating today’s extensive volumes and variety of traditional and new types of market data for opportunities is like trawling a vast ocean for sunken treasure. Bart Bartolozzi, senior product marketing manager at IPC, explains how getting the most out of today’s datasets requires a ship of tools to differentiate traders from a ship of fools.
Since trading’s earliest days, market data and trading technology have been managed separately. Traders studied the market data, then used their technology to place trades and seize opportunities. As the market has grown, it has become ever more complex and dynamic, transforming the consumption of market data and trading technology. Opportunities appear and disappear in the blink of an eye, forcing traders to move faster. For traders to successfully compete in this constantly evolving environment, it is becoming increasingly critical for market data and trading technology to be tied closely together.
Every day, new exchanges pop up and create markets for new products. The specific market data for these new markets—along with the methods and guidelines for trading within these markets—then goes to traders, who need to not only be able to quickly and easily access the new markets, but understand them and engage with the new opportunities they present. Markets are global, connecting traders 24/7, but successful participation in these markets is not just about being able to trade anywhere. Competing in today’s markets requires a tight, integrated environment. Traders need to be able to put all of their data and tools into a suitcase and carry it with them.
That need prompts a nettlesome question: what are the key tools that traders need in their suitcase? Decades of development have equipped traders with an astonishing array of gadgets, ranging from sophisticated phone turrets to large, heavy databases and servers. Such equipment requires more than a metaphorical suitcase to empower traders with the abilities they need in order to operate anytime, anywhere. It might be more accurate to say that traders require a metaphorical ship that allows them to carry their vast arsenal around the world.
Enter the “oceanographer trader,” the financial system’s adaptation of those scientists of the sea. The oceanographer has everything he needs with him in his ship—his navigational charts, his instruments, and all the accessories needed to do whatever needs to be done far from home. The ship can go anywhere in the world and operate alone for long periods of time, empowering its independent professionals with autonomy, resiliency, and adaptability, and represents the incarnation of the traits that traders need to do their jobs in the modern world.
Since traders can’t lug a steel vessel weighing hundreds of tons and loaded down with all of their trading gadgets anywhere—let alone everywhere—they must do their financial ocean trawling with nothing more than what they can pack into their metaphorical suitcase. While such a limitation may seem like a debilitating disadvantage, there are three tools that permit traders to not only confront such conditions, but to thrive in their business under whatever circumstances, and transform the basic execution of their work into a competitive advantage.
The first and most critical tool is integration: the ability to take an array of market feeds and combine them with communications streams between key market players to add a heightened color to what is happening in the market. It becomes not just about the market data, but about what people value in that market, what they are talking about, what’s trending. Strategies are developed based on this enhanced information, and tools are deployed to execute the strategy, either automatically or using alerts to elicit action.
The next critical tool is mobility: the ability to carry out the work from anywhere and at any time. Traders are people too: they go to the beach, get stuck in traffic, and go to the doctor just like anyone else. The markets don’t wait for them to finish these normal activities, so traders must make sure they don’t miss opportunities. The ability to let a trader work from anywhere opens up new opportunities and competitive advantages. Traders can travel to Brazil and get all their tools and market data via a financial extranet or mobile trading app while simultaneously getting the “pulse” on the street in person, supplementing market data with real-time observations.
The last critical tool is optimization: the ability to tap into social sentiment and social media and see how they relate to the opportunity. Aligning social data with market feeds and trading tools gives traders more clarity and transformational insights that the competition won’t have. Optimizing these—and optimizing mobility—allows traders to act on unique insights before the rest of the pack has even spotted them. This gives a competitive advantage to those who combine these tools effectively.
Cloud computing and mobile trading apps will increasingly make the advent of the “oceanographer trader” a reality, not just a futuristic pipe dream. For traders to be best positioned to compete in a highly demanding industry, data must be able to reach from any market to any place, while traders must be able to use their trading tools from anywhere in the world. From a trader’s standpoint, being able to combine market data and their trading tools via open-source platforms allows for the coalescing of all these into a whole that is greater than the sum of its parts.
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