About a-team Marketing Services
The leading knowledge platform for the financial technology industry
The leading knowledge platform for the financial technology industry

A-Team Insight Blogs

Opinion: Hybrid Algorithm Development Environments for Intelligent Trading

Subscribe to our newsletter

By Jamie Oschefski, Head of Accounts and Strategic Partnerships, Quantica Trading

It is becoming clear the latency arms race is quickly becoming a theme of the past. The fastest microwave networks between Aurora, Ill., and Carteret, NJ, is currently clocked at about 4.14ms (one-way), where the theoretical minimum is 3.95ms based on the speed of light. With only 0.19ms of improvement, this variable is fast approaching the physical limitations of the universe set by quantum mechanics and relativity. The unimaginable barriers to entry and exorbitant overhead in maintaining and advancing the infrastructure and technology required to keep a competitive edge, only a few trading firms can play in the space.

So where’s the new edge?

The focus in no longer on how fast a firm can trade, it’s on how fast firms can get from idea to execution. The opportunity is in the ability to get new or updated strategies to market in the shortest amount of time, whether it be through an intuitive development environment or the use of drag-and-drop strategy building tools.

One of the biggest changes in the financial markets industry has been the deployment of drag-and-drop technology, which allows traders to put their own strategies into production themselves without the need for any programming background. Our clients are looking for broker-neutral solutions that allow them to rapidly construct, test and globally deploy extremely complex strategies across all asset classes with the path of least resistance. What’s needed is to blend the speed of deployment of modern algorithmic development techniques with rigorous quality assurance and testing disciplines.

The process of connecting algorithm ‘states’ through rules-based signal generation is mirrored behind the intuitive interface with the underlying code. The user is essentially manipulating the building blocks of the complex event processor (CEP) with a variety of parameter values (such as looking at the NBBO spread or using a specific technical indicator), which are automatically inserted correctly into the code.

Conventional methods of developing quantitative or systematic trading strategies involve standard programming languages such a C++, JAVA and C#, or proprietary scripting languages commonly used by vendors as a tactic to ‘lock-in’ their users. The advancement in drag-and-drop strategy design has opened the door for firms to seek out hybrid development environments. When you eliminate the need for ‘coding’, you substantially decrease the time required for debugging and testing for correctness while virtually eliminating the opportunity for coding errors. That said, there will always be a need for a development environment specifically for the firms with highly skilled programmers.

Technology vendors with the ability to provide clients with a truly hybrid solution to incorporate the ease of a high-level drag-and-drop environment for visual construction, with an extensive lower level development kit specific for algorithm design, will ultimately come out ahead. Traders and computer scientists usually speak a different language, and this hybrid toolset will create a culture where traders and developers can actually work together.

Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: Opportunities of new approaches to electronic trading

Challenged by legacy systems, less than ideal workflows and high costs, front-office trading teams lack the ability to adapt to clients’ evolving needs around integration, speed and multi-asset capabilities. They are also challenged by a capital markets environment characterised by legacy systems, shrinking margins and increased regulatory scrutiny. While these problems cause considerable friction in...

BLOG

Valantic FSA Completes Strategic Investment in Low-Code Platform Provider Velox

Electronic trading and automation solutions provider valantic FSA, has completed a strategic investment in low-code development fintech Velox Financial Technology, to complement and bring further flexibility to its electronic trading business. The terms of the investment have not been disclosed, although valantic says it is “significant” and that it will allow the company to bring...

EVENT

Data Management Summit Virtual (Redirected)

The Data Management Summit Virtual brings together the global data management community to share lessons learned, best practice guidance and latest innovations to emerge from the recent crisis. Hear from leading data practitioners and innovators from the UK, US and Europe who will share insights into how they are pushing the boundaries with data to deliver value with flexible but resilient data driven strategies.

GUIDE

Enterprise Data Management

The current financial crisis has highlighted that financial institutions do not have a sufficient handle on their data and has prompted many of these institutions to re-evaluate their approaches to data management. Moreover, the increased regulatory scrutiny of the financial services community during the past year has meant that data management has become a key...