Opening Cross: Reaping the Data Whirlwind
As Hurricane Irene menacingly crept northwards to New York, exchanges assured members and clients that they planned to open last Monday, despite whatever wrath Irene may wreak, and would have plans in place to cope with any damage to their datacenters. The Chicago Board Options Exchange - well out of Irene's path - warned that its own plans would depend on any disruption to trading on underlying east coast markets.
As it turns out, New York City was spared the worst of the storm, though CBOE last week reported another kind of turbulence. According to the exchange, August was the most active month in its history, while the VIX Index - aka the "Fear Index" - also recorded a historic high, with 1.8 million VIX futures contracts traded in the month.
And we're not out of the woods yet: After peak message rates early in August, marketdatapeaks.com - the portal operated by Exegy, Essex Radez and the Financial Information Forum - reported a new peak for market data messages of 5.43 million messages per second on Aug. 25, compared to the previous peak of 5.25 million mps set on Aug. 4 during the height of the volatility early last month.
And just as the hurricane sent people along the east coast of the US running for cover, the ongoing storm in the financial markets is driving investors to seek out a safe haven for their trading.
Supposedly the turbulent markets are even prompting some to reconsider real estate as a higher-earning investment - or at least as "a safe place to park capital" in light of record low mortgage rates, despite low purchasing activity, according to real estate data provider Hanley Wood Market Intelligence. Meanwhile, the National Association of Real Estate Investment Trusts reported that returns from real estate investment trusts were double those of equities markets, with the FTSE NAREIT All Equity REITs Index rising 11.79 percent over the first seven months of 2011, compared to a 3.87 percent gain for the S&P 500 index.
If true, I would expect to see increased focus on real estate investment trusts and fundamental industry data such as that provided by XTF or REIDIN as investors - whether institutional or retail - exercise similar due caution as they would when entering a building site, having hopefully learned from real estate-related credit snafus that precipitated the economic crisis. But ironically, this lingering impact of a real estate/credit-driven crisis may in fact spark interest in rental real estate investments, according to Hanley Wood, since consumers soured by the experience of home ownership in a recession, negative equity and repossession will now be flooding the rental market - though another type of flooding, such as that resulting from Irene, could impact this particular market either way.
Real estate is just one (extreme) example: Traders and investors are looking for safe investments as well as more exotic trading opportunities. For example, growing participation and liquidity on Quadriserv's AQS securities lending platform - which is now seeing enough interest beyond its core client base of active participants to launch a standalone datafeed - shows that traders are paying more attention to this market as a way to make more money from their investments by lending their holdings, and as an indicator of activity in other, related markets. Meanwhile, Barchart's purchase of Stockgroup's data hosting business exposes it to a new base in Canada with the opportunity to expand its services as investors seek data on more asset classes.
This all leads me to believe that providers of niche datasets and sophisticated pricing tools - such as CMA, which is expanding its OTC valuations service to provide more flexible pricing, or energy supply data vendor Genscape, which has named former Thomson Reuters exec and strategy guru Matthew Burkley as chief executive - will be much in demand. Now, it will be up to them to reap the whirlwind before the opportunity blows itself out.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
More on Data Management
Mapping a successful data journey: strategy, execution and sustainability
A well-planned data journey can positively impact an organization’s long-term trajectory. However, it is important to have clarity not only in the strategy but also in successful execution and sustainability for the long haul, argues data veteran Subbiah Subramanian.
The IMD Wrap: The growing data catalogue space
With their potential to manage costs and surface strategic datasets, it’s no wonder Max gets excited about data catalogs. This week, he takes a look at a new startup entering the space.
LSEG to sunset Redi EMS in favor of Tora
Sources say competitors will look to seize on the decision to win over Redi’s sizeable US client base.
The IMD Wrap: Taking stock of inventory management
With market data and associated costs typically representing a firm’s third-largest expense, there’s a lot of incentive to manage data and its usage more efficiently. Max flings open his fridge to illustrate what’s new in this space.
Hub to lay off 20% of staff, sources say
Hub’s CEO says this is simply a case of a startup trying to stay nimble and efficient; others say it points to deeper issues.
TS Imagine integrates LTX’s pre-trade analytics tool
Users of the fixed-income EMS will now have access to LTX’s Liquidity Cloud tool, which provides a pre-trade score for the likelihood of trading success.
After contentious Opra upgrades, vendors brace for a faster future
Upgrades to the datafeed widely used to gauge the current market price for options contracts went into effect in February after three separate delays, which market participants say were caused by persistent bandwidth issues at some important recipients.
Most read
- Sell-Side Technology Awards 2024: All the winners
- Sell-Side Technology Awards 2024: Best sell-side front-office platform—Bloomberg
- Systematic tools gain favor in fixed income