The Company: Hedge fund with event-driven strategies that focuses on the bulk trading of equity options.

Marketcetera products used:

• Data Nexus: Market data adaptors
• Signal Analytics: Complex event processing
• Strategy Studio: Strategy development and Signal monitoring
• Marketcetera Platform as Service

Business Challange: Implement complex, data-intensive strategy ideas in a timely and cost-effective way.

Solution Benefits:

• New strategies can be implemented rapidly and easily — in just weeks rather than months
• Easy-to-use strategy authoring interface enables rapid strategy deployment
• Hosted, open source solution is highly cost-effective
• Flexible, scalable solution that can grow with the funds needs

THE CHALLENGE

With years of trading experience under their belt, the principals at this hedge fund knew what they wanted to do. But the question was — how to do it. Available options to realize their complex trading ideas were unviable — the technology to implement them was too costly, too cumbersome, or simply not there. To process, monitor and act on the vast amounts of market data they wanted to look at was prohibitively expensive — both in bandwidth and in development costs. Additionally, because the traders wanted to adjust strategies over time to see what worked, they needed a solution that was more flexible than the proprietary solutions on the market.

The hedge fund principals met with Marketcetera’s Graham Miller and Toli Kuznets to discuss their ideas and see if Marketcetera’s revolutionary open source automated trading platform might be the solution.

THE SOLUTION

Working closely with the hedge fund, Marketcetera developed a new Platform as Service model for its ground breaking open source automated trading platform that would provide the traders with the speed and cost-efficiency they were looking for. Traders can now monitor distilled signals as the platform processes over 60 million messages per day to monitor over 800 symbols. Marketcetera sends pre-filled order tickets to traders for review who then route orders to the marketplace — all faster than previously possible, and without requiring large up front infrastructure costs.

Marketcetera’s Automated Trading Platform provides the fund with the cutting edge technology it needs without the up front infrastructure and development costs. And because the customer is using the Platform as Service offering, the fund is free from ongoing maintenance costs and responsibilities. Traders simply provide the business logic for their strategies and Marketcetera does the rest.

THE BENEFITS

Marketcetera provides the flexibility and agility that this hedge fund wanted. Because most proprietary solutions don’t allow the same level of flexibility provided by Marketcetera open source platform, the fund would have been handicapped in building solutions to meet its needs. Marketcetera’s platform is lean but powerful, enabling the fund to start small and add on to the solution as needed, ensuring that its financial and intellectual investment is targeted where it will have the most impact.

The customer is taking advantage of Marketcetera’s integrated complex event processing (CEP) capabilities, which offers the fund the flexibility and power it needs to move more quickly in the market, and with fewer errors. The intuitive Strategy Studio allows both technical and non-technical traders to design, test, and implement new strategies quickly and accurately, resulting in significant productivity improvements.

Now that initial development for the managed service solution is in production, traders at the fund can adjust strategies and implement new ideas in just a couple of weeks, not the months that would be required using other solutions. This agility means that the fund can test new strategies easily and respond quickly to what is working, and what’s not, in the market.

As a specialized boutique investment management firm, the fund made a strategic choice of outsourcing their trading technology build out and operational management to Marketcetera.

THE FUTURE

Marketcetera’s automated trading platform offering has been a success for this hedge fund, allowing the company to realize its trading goals quickly and cost-efficiently. The company plans to build on this success, rolling out new features in the future, including the implementation of multiple options orders.