Tradovate, a US online brokerage firm catering to self-directed futures traders, has deployed Eventus Systems’ Validus trade surveillance platform to identify patterns of dangerous activity within its order flow, as well as to meet regulatory requirements, including monitoring and ensuring the proper use of regulatory tags.
The firm is using Validus to monitor more than 2.5 million orders per month through Tradovate’s platform and middleware, as well as any third-party platforms connected to Tradovate’s API. Exchanges currently being monitored at Tradovate are CME, CBOT, NYMEX, COMEX, Eurex, ICE US, ICE Europe, Small Exchange and FairX.
Rick Tomsic, Tradovate’s Founder and CEO, says “the Validus platform [has] been a great tool for us to help our trade desk identify and drill down into any potential trade irregularities. The combination of pre-built surveillance procedures, with reports and protocols we can customise based on our needs and client base, is extremely powerful. Validus gives us the ability to dive deeply into any suspicious or unusual order flow activity at a very granular, detailed level, giving us comfort both from a trade desk and compliance standpoint.”
“Eventus does a great job of offering views that make it easy to visualize the market with respect to customer orders,” adds Tradovate Trade Desk Manager Terry Nelligan. “We’re able to find suspicious patterns within a single client account or those that may emerge between multiple clients. Validus makes it simple, easy, and intuitive, providing a visual representation of activity for the period when an alert is triggered that goes beyond what we would be able to monitor on our own.”
Validus uses machine learning and robotic process automation (RPA) to drill down into alerts and identify market behaviour that could lead to regulatory or reputational consequences. The platform’s visualizations allow front-office supervisors to quickly detect problematic behaviour.
Tradovate first went live on Validus in June of 2021, with the implementation project lasting four to six weeks from data delivery. Although Eventus offers the option of monitoring activity both in real-time and on a T+1 basis depending on a client’s needs, Tradovate is currently using the Validus T+1 option to perform trade surveillance on a post-trade basis.
Eventus CEO Travis Schwab says “Firms like Tradovate with extensive retail activity appreciate the ability to rapidly follow up and explore any unusual order flow patterns. This is a great example of how our platform can be used not only by compliance and regulatory teams but by front-office supervisors. We commend the firm for going above and beyond what’s required in order to stay ahead of any potential issues and leverage the many capabilities Validus has to offer.”