Welcome to 2012 from Low-Latency.com! We hope it will be a year of success and prosperity for all in our community. We ended last year with a few of our own predictions, to to get this one going, we asked some of our friends what they expected to see over the next 12 months. Here are some of the best responses …
Low-Latency Data and Trading Services:
Daniel May, SpryWare: “Market data rates will continue to grow, but at a faster rate. There will be further specialised feeds direct from exchanges (i.e. Volatility/Greek feeds, Complex Order Books, etc.). Also, we see the emergence of two sets of feed offerings, for ultra low latency order and traditional NBBO … one size no longer fits all. But also we believe there will be consolidation among the nine U.S. options exchanges.”
Frank Piasecki, Activ Financial: “Ultra low latency for single digit microsecond performance will continue to be a need for a growing but limited community is one segment. Far larger is the market need for better latency for the more traditional and larger real time subscriber base where speed is important but other attributes that are antithetical to speed come to the fore: tick integrity for pre-trade analytics and strategy back testing are increasingly important to the trade cycle, book depth management, synthetic NBBO’s, risk obligations, and credible exchange models offering protection against high frequency strategies.”
Tony Moulange, Colt: “In foreign exchange, the time zone and geographical scattering means that the locations of the servers in relation to the data centre is a major key to future HFT success in this particular asset class. For OTC Derivatives, prior to products such as CDOs moving to ‘lit’ exchanges, the accepted level of data transfers are very high and rising fast. This is even before any new OTC prices and reporting traffic comes onto the exchange. The good news for the OTC derivatives market is that networks are now planning to cope with this demand.”
On Data Analytics:
Louis Lovas, OneMarketData: “There will be increased demand for data analytics, which will drive greater need for visualisation to explain data sets, prompting further questions thus driving more in-depth analysis. Also, an increased emphasis on the value and importance of data as a crucial corporate asset, and the role of Chief Data Officer will gain prominence for defining a firm’s data strategy.”
On Keeping IT all running:
Jo Kinsella, Sumerian: “Increasing complexity, exploding data volumes and unprecedented levels of market volatility are testing today’s trading environments, as well as the IT teams running them. More than ever, trading firms need optimised, high performance trading applications with low latency and ultra fast access to market liquidity and trading venues. To gain this control and reduce latency, it has never been more critical to have visibility into the constantly changing dynamics between IT supply and trading demand. In 2012, firms will turn to the power of predictive analytics to ensure they best understand whether there is enough capacity available to meet business growth projections and win the race to lowest possible latency.”
On Managed Services and Cloud:
Harrell Smith, PortWare: “We expect to see widespread adoption of cloud-based trading services in 2012, as firms look to streamline trading operations and reduce operational overhead. Even larger asset managers who historically shied away from ASP platforms due to their functional and performance limitations will begin moving towards managed trading solutions. The reason? Companies can now deploy a new class of cloud-based trading system, one that bridges the gap between the convenience of ASP platforms and the sophistication of locally deployed, enterprise-class solutions. This new model represents best of best worlds, and will make the cloud significantly more inviting than it was in the past.”
Mark Casey, CFN Services: “The cloud will play an increasing important role in aggregating and managing the exponentially growing base of data and the back office systems necessary to support it. Overall, I foresee some exciting innovations in the way trading firms chase Alpha and the financial technology and services that will support rapid time-to-market.”
On Regulation and Big Data:
Paul Metcalfe, Orange Business Services: “Given that we have seen such turmoil in financial markets during the second half of 2011, the industry will be bracing itself for a challenging 2012. We expect to see further investment necessary to meet compliance needs of more comprehensive regulatory controls and oversight, as well as reviews of current infrastructure to build improved and more cost effective platforms for the future. Regulators are looking for retention of a wider range of trade related data (including recording of voice) over longer periods of time, all contributing to the growing issue of ‘big data’ and dramatically increasing the need to hold more information online. This fast growing data source will require secure, immediate and reliable access and analysis from anywhere within the enterprise.”
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