Baxter to Add Algos

The offering is currently in its beta version, with select Baxter customers testing it out and proving feedback, says Franck Mikulecz, managing director with Baxter.

After the first stage of development, which took about a year, specific customers are now able to send their algorithms to Baxter in Java code to be run in the ECN's algorithm boxes. Then, traders can send Baxter the name of the algo strategy they want used and a FIX message with the parameters of the trade to be executed on the ECN.

The new offering will be embedded into Baxter's trading system, says Mikulecz.

Baxter is currently in the second half of development, which will give customers access to a full set of back-testing tools.

"The customers will actually be able to design their algo, send it to us through an interface ... and we'll be able to run those algorithms on a back-testing set of data in our environment and get the results back to the customer," Mikulecz says.

Once the client is satisfied with the test results and declares the algorithm ready for production, the trading strategy is then integrated into Baxter's system to be used by the customer when requested.

"It will be a sort of an [application service provider] solution for them," Mikulecz says, adding that the clients will have the ability to test their algos on Baxter machines that may be more powerful. In addition, traders won't have to download all the historical market data necessary to back-test the strategies.

To aid in the progress of the algorithm capabilities, Baxter is working with one of its long-term independent development partners Kent Gryzich. Gryzich is coming to work with the vendor in November, according to Collette Bird, marketing manager for Baxter.

Once the new offering is launched to all users, Gryzich will gain a position at Baxter, most likely as chief algorithm developer, Bird says.

The final solution will be FIX protocol compliant, according to Mikulecz. Although FIX is not yet a standard in the FX marketplace, nearly 70 percent to 80 percent of orders coming into Baxter are already in FIX, he adds.

"We are very much looking to equities [for what will happen] in FX next," Mikulecz says. "The FX market is evolving and transforming."

Baxter's future business and development plans follow closely in the footsteps of the equities marketplace, Bird says. The first in such a line of products was the Baxter FX clearing service, launched late September, she says, without revealing details about follow-up products.