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

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Recently, there has been a lot of information distributed in the industry regarding latency in optical transport systems. This white paper takes an objective look at what really causes latency in transport systems and what to look for in a transport system designed for low latency. Download Now

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.

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.

NEW YORK (Dow Jones)–This is proving to be a banner year for volumes among foreign exchange retail investors, even as institutional traders say 2009 will pale in comparison to the striking growth seen in 2008 and 2007.

Volumes on dbFX, the online retail trading platform from Deutsche Bank, increased 37% in the first quarter of 2009 from the same period a year earlier. Compared to the fourth quarter of 2008, volumes jumped 4% in the most recent period. The latter rise was particularly impressive given sharp volume gains in October, at the height of market fears, when retail investor interest spiked due to intensified volatility.

Other retail platforms have anecdotal revealed the same trend, from big Citigroup to the smaller Global Forex Trading. Increasingly, investors are taking advantage of financial market instability through currency trading, although many warn that the market is too volatile for most non-professional traders.

“More and more people are leaving the equities market and coming into foreign exchange, as foreign exchange is a non-correlated asset over the long term,” said Betsy Waters, global director of dbFX.com.

Euros, dollars, pounds, Turkish lira – none rise and fall alone. Their values fluctuate in reference to another currency. This means no matter what is going on in equities or commodities markets, traders can make a buck by betting on some currency out there. This is especially worthwhile to investors in countries that forbid betting against an asset.

This has proven useful in a year when investors have to maneuver around falling commodities and stocks, and may be searching to diversify.

But part of the rise in retail volumes is also attributable to the fact this sector is relatively new. dbFX itself launched in June 2006. Volumes on dbFX between 2007 and 2008 increased by two-and-a-half times, according to Waters.

On the institutional side, analysts have said it will be hard for foreign exchange teams to compete in 2009 with the volumes they grossed in the previous years.

In addition, the train of thought is different between these two sides.

For instance, the heightened volatility at the end of 2008 was considered too treacherous for bankers. Actual position-taking among these players has been thinner than in previous years since the breakdown of Lehman Brothers and Bear Stearns sent fear through the market. Traders have more rules on who they can deal with. The crisis has also led many houses to disable algorithmic trading models, which had been big volume drivers. In addition, currency market flows in the institutional investor space can change for any number of reasons, like hedging strategies or just a need to move money.

However, trading trends observed at dbFX are not unlike those among larger investors.

Traders moved away from the carry trade, where they were chasing interest rate differentials, in favor of chasing trends. The pairs with the most volumes were the majors – euro-dollar, U.K. pound-dollar and dollar-yen.

-By Riva Froymovich, Dow Jones Newswires; 201 938-5063; riva.froymovich@dowjones.com