Use Case: Fully Managed Trading Infrastructure

Author: Judy Misbin-May

As lead traders in large corporate investment firms and banks begin look for more control over their future, many are taking the leap to start their own Proprietary Trading Firms.  One such newly formed High Frequency Trading firm, came to CFN Services with a challenge. Their goal was to be up and trading real-time within a 30 day window. They had been working with many vendors to integrate a comprehensive solution that would optimize the trading ecosystem from pre-to-post trade execution.  As they dealt with contracts, vendors and many headaches, they requested of CFN to make this process easier so they could focus on their goals and profitability for their multi-asset trading strategy

Solution:

CFN FAST Platform (Financial Application Services Trading Platform) provided the value to this firm that they required, yet the flexibility and control they insisted on. Through the module approach offered by CFN Services, the trading firm was able to pick and choose the areas they wanted to keep in house and areas they wanted to outsource. They did not need to question their buying decisions as CFN is host/carrier neutral picking the best solution for each specific client. CFN also gave them peace of mind by providing the firm a few solutions with the pros and cons of each clearly articulated. The trading firm also did not want to lock up cash in their trading platform, and with CFN Services was able to implement their full solution with little capital outlay.

Outcome:

Utilizing CFN expertise and suite of products, this firm was able to greatly reduce the volume of partners and vendors they needed to negotiate and sign contracts with.  This alone provided them the ability to free up to 25 hours a week of the pre-start up time to focus on the core area of the business.  The goal to be up and trading within 30 days was accomplished, without divulging proprietary information. The trading firm acknowledged that CFN helped accelerate the development cycle and allowed them to strengthen their place in the market.

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Article Source: http://www.articlesbase.com/currency-trading-articles/use-case-fully-managed-trading-infrastructure-4326531.html

About the Author

Available Now: 2010 Trading Beyond the Horizon

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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.

The successful operations – whether they be the proprietary desks of traditional broker/dealers, specialist high frequency and algorithmic traders, or quantitative hedge funds –  will leverage a trading infrastructure that combines high performance analytical, algorithmic and order routing platforms with the lowest latency access to multiple, geographically dispersed execution venues.

Multi-market trading – leveraging a fragmented market landscape – introduces new challenges, even for trading firms that have mastered the complexities of low-latency execution using approaches such as co-location and proximity.  Those mechanisms, while still relevant, provide a less complete solution when trading across markets that are geographically dispersed.

New entrants into the market for connectivity and proximity services include organizations that are themselves market participants, such as sell-side firms offering sponsored access and DMA, and liquidity venues, which are now providing global order routing networks, in some cases channelling order flow to their competitors.

Those service providers join traditional players including telcos, hosting companies and value-added extranet vendors, who often bundle trading applications with connectivity.

The bottom line: For multi-market trading, optimization of long-haul and metro communications links, combined with smart use of co-location, is an imperative for achieving the lowest latency, and this requires an understanding of connectivity offerings at a deep, granular level.

This  industry briefing explains the drivers for fragmentation and multi-market trading, the evolving landscape of market access, and explores connectivity approaches to minimize latency.

Check out the newest knowledgeportal to support low latency and dark fiber news and resources.

Herndon, VA June 1, 2009 (PRWeb) CFN Services, the leader in Low Latency Network Solutions, is now expanding their offerings into Toronto. CFN is offering the lowest latency connections for global markets to key Toronto exchanges: Alpha Trading, Pure Trading, Omega ATS, MATCH Now, TMX Group, and Chi-X Canada. Now traders globally can receive a trading advantage in Toronto by partnering with CFN Services.
CFN is a leading ultra low latency and custom fiber optic network integrator in the financial industry; offering specific Ultra Low Latency solutions for the trading areas in Toronto, Chicago, New York/ New Jersey Metro, Washington DC, London, and Frankfurt.  CFN is recognized as the only network provider to offer a Latency Level SLA along with a Latency Improvement Plan. CFN Services sets themselves apart from other transport vendors by offering carrier neutrality, professional services, fully managed services and the ability to design and implement custom fiber networks.
“We are seeing a transformation in trading on Canadian markets as ATS’s like Alpha, Pure, Chi-X, Omega, and dark pools are challenging TMX Group’s historical dominance.  This transformation is providing fertile ground for global high frequency traders; particularly those throughout North America.  We are meeting the needs of these traders by providing our customers the best networking solutions to accelerate trading,” states David Conrad, Vice President of Sales. “We prioritize the routes and trading areas that are key to our customer’s success, and Toronto is now one of the areas that we will offer guaranteed low latency optimized network solutions.”

CFN Services’ FiberSource® Telecom Platform provide them the ability to view all available fiber, including that of Utilities, Carriers, Dark Fiber and Collocation Providers; in order to put together the optimal network routes or provide custom network solutions specific to a customer’s exact requirements and priorities. The key to the integrated solution provided by CFN Services is the ability to identify metro fiber, long haul and the collocation space to piece together the carrier networks onto one optimal path.  This translates into a networking performance advantage for an electronic trading firm. This allows CFN Services to be Carrier and Data Center agnostic, ensuring to provide the best solution based on latency, performance and stability not on relationships.
Trading Firms now have the ability to reduce Fiber Optic mileage, decrease latency and have confidence that your network decisions were made with the knowledge of all existing options.
About CFN Services
CFN Services is a managed telecom infrastructure services company providing network services for the Enterprise, Public Sector and Carrier Markets. Specializing in network planning, deployment, and managed services, including local access transport, low latency networking, and mobile backhaul optimization, CFN Services leverages the company’s flagship FiberSource® network planning and optimization platform. CFN Services has provided network planning and deployment services to some of the leading wireless and wireline network operators including Verizon, AT&T, Level 3 and Sprint.  For more information please see http://www.cfnservices.com.

Offer Telx customers In New York and Chicago a complete, low-latency financial networking solution

Key Highlights:

• New relationship joins CFN Services’ low latency network with Telx’s proximity hosting advantages.

• CFN’s ultra low latency solution guarantees a round-trip connection between Telx’s NY metro and Chicago facilities that is at or below 16.6 milliseconds.

• Telx customers gain direct access to a leading network integrator and design firm serving the financial services industry.

• A common carrier-neutral stance provides CFN and Telx customers with optimal solutions.

NEW YORK and CHICAGO (May 27, 2009) –  Telx, one of the largest and fastest growing domestic interconnection and colocation data center operators, announced today that custom network provider CFN Services has added network nodes for its ultra low latency financial network in Telx facilities at 60 Hudson Street and 111 8th Avenue in New York City as well as in 600 South Federal Street in Chicago. These new nodes allow Telx Financial Exchange customers colocated in New York, New Jersey, and Chicago – including Telx customers colocated in the company’s facility at 350 East Cermak Street – access to CFN’s ultra low latency network, which guarantees speeds of 16.6 milliseconds or better.

The addition of CFN into Telx facilities helps Telx customers gain an optimized network configuration to ensure the ultra low latency for all pieces of the trading process from market data feeds, ticker plants, exchanges and other key trading platforms. These services can provide the competitive advantage that financial companies need to gain an edge in today’s market. CFN Services will also work to implement a customized plan to ensure that the network configurations are optimal based on each customer’s individual criteria.

“In the current market, financial services companies need every advantage available to thrive,” says Eric Shepcaro, CEO of Telx. “The suite of financial service providers and ultra low latency networks, such as those offered by CFN, are critical to our customers’ success. Telx remains committed to seeking out service providers who can help our customers realize their full business potential.”

In addition, the carrier-neutral stance adopted by both Telx and CFN provides added advantage for customers: by bringing a wide variety of service providers to the table to compete for your business, Telx helps customers get the lowest available service price with high-quality proximity hosting; while CFN creates custom networks utilizing optimal spans from available routes based on the customer requirements regarding latency, price, optimization, performance, and time to install.

“In addition to ultra low latency networking, CFN offers unique, performance-level SLAs that guarantee a specific latency today and network improvements that guarantee latency improvements over time,” said Wil Tirado Vice President of Engineering for CFN. “When obtained from within a Telx colocation facility, customers are assured a long-range business plan for growth that accommodates both current and future needs for decreased latency and increase space, power, and cooling over time.”

About Telx
Telx is a world-class leader in providing interconnectivity solutions through their network-neutral and network rich, colocation facilities.  With over a dozen facilities in North America, Telx offers cost effective networking solutions for customers to seamlessly access diverse global networks and exchange information in a secure and reliable environment.   Over 600 leading telecommunications carriers, ISPs, content providers and enterprises rely on Telx’s world-class team to support their mission-critical global infrastructure needs and to create a global connectivity marketplace to dramatically expand their business growth opportunities.  Telx is a privately held company headquartered in New York City with facilities in New York, Atlanta, Chicago, Dallas, Los Angeles, San Francisco, Santa Clara, Miami, Phoenix, Charlotte, as well as Weehawken and Clifton, N.J. For more information about Telx, visit www.telx.com.

About CFN Services
CFN Services is a managed telecom infrastructure services company providing network services for the Enterprise, Public Sector and Carrier Markets. Specializing in network planning, deployment, and managed services, including local access transport, low latency networking, and mobile backhaul optimization, CFN Services leverages the company’s flagship FiberSource® network planning and optimization platform. CFN Services has provided network planning and deployment services to some of the leading wireless and wireline network operators including Verizon, AT&T, Level 3 and Sprint.  For more information, visit www.cfnservices.com.

Proximity Hosting Can Only take you Half Way There

Zero latency is the optimal trading speed that all firms hope to achieve at some point. But until that can become a reality, there is a race to keep reducing latency from all aspects of the trading process. From the server to the messaging to the sending and receiving of data, each piece must be optimized to reach the goal of zero latency.  There are many avenues companies are looking at to reduce variables and risk to latency – one of those is proximity hosting.

There are data centers where the trader can actually collocate with the exchanges. For example, in Weehawken, NJ there is a data center that houses five major exchanges including: the American Stock Exchange, Philadelphia Stock Exchange, and BATS Trading. This is a way to ensure there is almost zero latency built into the trade to those exchanges. But it is not the complete puzzle. Even with proximity hosting to collocate within a data center that houses exchanges there are still external servers that play a role in the execution of the trade. These are the data feeds, the platforms, your proprietary content, and the messaging. Even the data centers that host the exchange as a simple cross connect, are rarely the only exchange a firm is trading on. So how do you close the gap?

While a firm may be trading a particular asset class and the majority of trades may be directed toward a single venue, the volumes and price-points on related exchanges play critical roles in execution decisions.  This means latency must be minimized from all data sources, not just the venue the majority of trades are placed on.  For instance, having the lowest latency on venue A, but being significantly behind the market on venue B or C could have disastrous impact on success of a trade decision.  It’s important then, to reach a delicate balance between the lowest latencies on all data sources and execution venues.

Where milliseconds and microseconds make a difference to the success of a trade strategy, the idea of Central Proximity hosting is to find locations that are central to most of the destination you need to access. There are a number of hosting locations within the NJ/NY trading area: Clifton, North Bergen, and Weehawken, NJ just to name a few that provide central proximity hosting. Central Proximity Hosting enables firms to locate within a few miles of all the locations and data a trade strategy needs for successful execution.  So that makes up half of the picture – how do you complete the race to speed-of-light transport?

The network provider does the rest. A Carrier is a good solution for the transport of data when latency and performance are important, but not critical. When latency reaches a level that’s critical to your success and your strategic advantage, you need a more agnostic approach to finding the best network. In working with each Carrier, they will provide you their “on net” best solutions between locations. This approach is not always the best solution for your specific needs. And it’s here that a network integrator offers you a measurable advantage comes into play.

The network provider that you partner with must be able to provide the lowest latency solutions for the metro ring and the longhaul. The network integrator you work with should be Carrier Agnostic, to ensure you are getting the optimal solution for your needs and not a solution based on the relationship an integrator has with a Carrier.   Some integrators, like CFN Services, can even go a step further. Beyond optimal solution recommendations for your specific strategy and requirements, they can also create new routes specific to your priorities. An integrator like CFN Services can actually utilize optimal spans of available fiber to create new fiber routes that do not exist along any single Carrier.

In the race to Alpha, the combination of Central Proximity Hosting coupled with the Low Latency Transport is key to your success.

Zero latency is the optimal trading speed that all firms hope to achieve at some point. But until that can become a reality, there is a race to keep reducing latency from all aspects of the trading process. From the server to the messaging to the sending and receiving of data, each piece must be optimized to reach the goal of zero latency.  There are many avenues companies are looking to reduce variables and risk to latency – one of those is proximity hosting.

There are data centers where the trader can actually collocate with the exchanges. For example, in Weehawken, NJ there is a data center that houses five major exchanges including: the American Stock Exchange, Philadelphia Stock Exchange, and BATS Trading. This is a way to ensure there is almost zero latency built into the trade to those exchanges. But it is not the complete puzzle. Even with proximity hosting to collocate within a data center that houses exchanges there are still external servers that play a role in the execution of the trade. These are the data feeds, the platforms and the messaging. Even the data centers that host the exchange as just a cross connect, rarely are they the only exchange a firm is trading on. So how do you close the gap?

The idea of Central Proximity hosting is to find locations that are center to most of the locations you need to access. There are many hosting locations within the NJ/NY trading area: Clifton, North Bergen, and Weehawken, NJ just to name a few that provide central proximity hosting. Central Proximity Hosting is getting within a few miles of all the locations a trade needs to execute.  So that makes up half of the picture – how do you complete the race to speed of light transport?

The network provider does the rest. A Carrier is a good solution for the transport of data when latency and performance are important but not critical. When latency reaches the level of critical you need a more agnostic approach to finding the best network. In working with each Carrier, they will provide you their “on net” best solutions between locations. That is not always the best solution for your specific needs. This is where a network integrator comes into play.

The network provider that you partner with must be able to provide the lowest latency solutions for the metro ring and the longhaul. The network integrator you work with should be Carrier Agnostic, to ensure you are getting the optimal solution for your needs and not a solution based on the relationship an integrator has with a Carrier.   Some integrators, like CFN Services, can even go a step further. They not only can make recommendations as to the optimal solutions for your needs, but they can create new routes specific to your priorities. An integrator like CFN Services can actually utilize optimal spans of available fiber to create new fiber routes that do not exist along any single Carrier.

In the race to Alpha, the combination of Central Proximity Hosting coupled with the Low Latency Transport is key to your success.