Optimizing Infrastructure for Trading Performance
Automated trading in the financial markets continues to grow, as it is adopted beyond equities into other asset classes, and as its use expands globally.
While some classes of automated trading – such as High Frequency Trading, Arbitrage and Market Making – continue to require a continued focus on reducing latency, from milliseconds to microseconds to nanoseconds, much of the marketplace is not as latency sensitive.
For the bulk of the market, latency is just one consideration to factor into an infrastructure to support automated trading. Other key considerations include the agility of the platform to adapt to changing business requirements, overall time to market to deploy, and the cost of deployment and operations.
Building and operating one’s own infrastructure is complex, time consuming and costly. While there are certainly a number of trading firms that will always want to go this route for competitive advantage (real or perceived), for many other firms, the challenges involved are increasingly show stoppers, because real business ROI is not achievable.
However, the advent of managed infrastructure services – provided by trusted partners who have proven technology, communications and operations expertise – provides an innovative and strategic route for most trading firms, both established and emerging, to engage as peers with those in the bulge bracket.
This white paper examines the increase of automated trading, and compares and contrasts dedicated infrastructure versus managed service approaches to successfully engaging in it.