Those with long memories of animated ad campaigns will recall how UK credit card brand Access was known affectionately as “Your Flexible Friend.” Though since absorbed by MasterCard, the slogan remains true for the financial markets: Access and flexibility are friends indeed to the modern data and trading world.
Those with long memories will also recall how, in years gone by, exclusive access to broker data was a boon for data vendors. If the market needed bond prices, it had to go to the vendor with the biggest broker’s data. Nowadays, being the conduit for potentially valuable data is still the position to be in: For example, Wiener Börse last week added data from the Belgrade Stock Exchange to its Alliance Data Highway feed, strengthening its position as a gateway to data from Central and Eastern Europe’s exchange markets—an area expected to drive future growth.
Another market poised for more growth is India, with multiple exchanges and a burgeoning, tech-savvy middle class with disposable income. Though India’s trading volumes are still relatively low, the potential for retail flow and foreign investment to increase these significantly and quickly is both a business opportunity and operational threat that firms must be prepared for. Hence, Mumbai-based Dolat Capital is rolling out a messaging layer from Real-Time Innovations that will provide the speed and capacity required to support anticipated future growth in Indian options trading.
Speed is an even greater issue in those markets already battling these issues—and one where trading firms and vendors alike are willing to invest obscene amounts of money, on the basis that a tiny speed advantage over their rivals will pay huge dividends in terms of being first to the best price.
This dogged pursuit of speed has led clients to demand access to the 165 Halsey Street datacenter in Newark, NJ from low-latency dark fiber provider Spread Networks, which says it already has clients signed up for its Ethernet wave service, which now provides roundtrip latency of 15.5 milliseconds between the facility and Chicago.
Likewise, Hudson Fiber Network’s deployment of optical network cards from Vello indicates a healthy obsession with nanoseconds to deliver the lowest-latency connectivity over its network between markets in the New York/New Jersey metro area.
But how long this will remain a competitive differentiator is under scrutiny. Some say the cost-benefit ratio will soon become so small that speed—while still a necessity for efficiency—will no longer deliver an advantage in mature markets.
So, once you’ve accelerated the data delivery as much as is physically possible (or economical), what do you do next? One suggestion is that you accelerate other aspects of the data flow beyond just data from liquid marketplaces, such as complex calculations and analytics—for example, by using a GPU-powered appliance to run pricing and risk calculations in a fraction of the time, as high-performance analytics provider FuzzyLogix is doing with its Tanay appliances (and for a fraction of the expense, the vendor says).
Or, another area garnering interest is data clouds, and their ultimate potential to deliver not just on-demand data but “app stores” of content and services, such as those envisaged by developer Epam, which last year bought InfoNgen, the latest brainchild of Multex founders Isaak Karaev and John Mahoney.
The key appeal of these “app store”-style models isn’t just their accessibility but their flexibility: the ability to not just obtain data, but to obtain exactly the data you want in the way you want—like Mergent making its fixed-income database accessible on-demand via its API—and potentially for the price you want. It may not be long before you can literally pay for the data you need with your credit card, and data itself becomes your new Flexible Friend.
Bill Murphy, CTO of Blackstone, once again joins the podcast to discuss the private equity firm's new offices, designed to house its innovations team.Subscribe to Weekly Wrap emails
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