Opening Cross: Fast Forward—Targeting Tomorrow’s Traders Today

The recent shake-up in Thomson Reuters’ Markets division led some to speculate that chief executive Tom Glocer would announce dire second quarter results last Thursday, July 28. But in fact, the vendor’s overall financials were pretty positive, with revenues up 4 percent before currency impact to $3.2 billion, and underlying profit up 17 percent to $669 million.

The vendor’s Professional division (the former Thomson Legal, Tax & Accounting and Intellectual Property & Science business units) showed the most consistent growth, whereas before currency impact, the Markets division’s Investment & Advisory and Media units both saw a small drop in revenues, and its Sales & Trading unit grew only 1 percent, while the Enterprise group posted a 10 percent gain.

Glocer expressed disappointment in the division’s performance, and spoke of feeling the need to urgently address the issues. He also said that the vendor’s Eikon next-generation desktop would be sold as part of an integrated strategy, whereas previously, “we were not leveraging the strength of the entire financial business in the development and marketing of Eikon,” and that the vendor will examine its product roadmap and may re-prioritize some developments before a “significant” update in Q3.

Thomson Reuters developed Eikon with the intention of utilizing intuitive web technologies that would be more familiar to the next generation of traders entering the financial markets than the clunky workstations and shortcuts of old. And an increase in Eikon sales of 45 percent over the first quarter to 28,000—with 6,000 positions up and running in active use—suggests this may pay off. But it may well have been given a helping hand by other twists of fate and technology.

The idea of products tailored to appeal to future audiences—or trying to get your product in front of potential consumers early on in their career—to engender product loyalty later on isn’t new: Technical analysis and charting software vendor TraderMade licenses its Aca­Trader product to universities teaching financial courses, and even collaborates with colleges to provide courses, lecturers and examinations, in addition to logins to the product for students. “The reason we go into the educational side is because we want people to become familiar with our products—we see it as early-stage marketing,” says TraderMade chief executive David Upton.

Similarly, tick data management technology vendor OneMarketData’s recent deals with Columbia Business School, the Rotterdam School of Management and the Stevens Institute of Technology to support various quantitative research initiatives also expose a large potential user base to the vendor’s technology, which could indirectly lead to future deals as academics become practitioners.

However, there are now ubiquitous initiatives to familiarize consumers—from wannabe traders to the average investor—with data, analytics and trading techniques. For example, technical analysis provider Recognia last week unveiled an iPad app for chart pattern recognition, while Chicago-based data vendor Barchart announced an agreement to make its data available via iChartist’s iPad charting app, exposing both vendors to a broader and more mobile user base. Meanwhile, to make data more available to individual end-users Deutsche Börse’s Market News International subsidiary launched a new website that includes pay-per-view access to premium content, while the Tokyo Stock Exchange now sells stock price and index data and market statistics online with the option to pay by credit card, to attract more retail users.

These initiatives all increase availability and accessibility of data and tools, producing a better-educated user pool overall that will be better placed to get the most out of professional-grade tools when the next generation of traders graduate to the trading floors—and may even accelerate adoption of tools like Eikon in the meantime.