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Low latency connectivity has enjoyed a resurgence of interest as high-performance trading architectures become a reality. Early interest in the low-latency ‘vision’ may have been interrupted by the global financial crisis, but no matter: low latency is back, and providing the catalyst for the explosion in high frequency trading.
As liquidity continues to fragment – in the US and globally – electronic trading operations are demanding connectivity to a broader array of execution venues. As well as traditional exchanges, traders today need access to alternative trading systems, including electronic communications networks, dark pools and multilateral trading facilities (MTFs). Securing and maintaining a robust, high-performance connectivity solution is key to providing comprehensive market access.
In 2010, financial markets participants will continue to expand their trading activities as liquidity increasingly becomes fragmented, seeking alpha in new markets, best execution in dark pools, arbitrage opportunities across the order book and by implementing high frequency and complex, multi-leg, cross asset class strategies.
Today speed is crucial to any trading venue that wants to stay competitive. At the same time, with high-frequency trading gaining an increasing share of overall volumes, the ability to manage rising transaction volumes is also a necessity.
Low latency technologies continue to be deployed by the financial markets - driven by the need to adopt them simply to stay in the trading game, and hopefully win at it. But low latency covers a wide range of components - from networks, to server hardware, to operating systems and middleware, to middleware, and to applications. In the low latency equation, there are many moving parts.
Over the past couple of years, Complex Event Processing has emerged as a hot technology for the financial markets, and its flexibility has been leveraged in applications as diverse as market data cleansing, to algorithmic trading, to compliance monitoring, to risk management. CEP is a solution to many problems, which is one reason why the emerging marketplace is growing, with many vendor options to choose from.
Issue 6 of A-Team Group’s contributed thought leadership quarterly Low Latency - Are You Performing? is now available for download.
