{"id":24386,"date":"2012-11-19T13:00:00","date_gmt":"2012-11-19T19:00:00","guid":{"rendered":""},"modified":"2020-09-17T10:16:43","modified_gmt":"2020-09-17T15:16:43","slug":"who-needs-another-multibroker-execution","status":"publish","type":"post","link":"https:\/\/tradingtechnologies.com\/blog\/2012\/11\/19\/who-needs-another-multibroker-execution\/","title":{"rendered":"Who Needs Another Multibroker Execution Platform?"},"content":{"rendered":"<div class=\"separator\" style=\"clear: both;text-align: left\"><\/div>\n<div class=\"separator\" style=\"clear: both;text-align: center\"><\/div>\n<div style=\"text-align: left\">\n<table class=\"tr-caption-container\" style=\"margin-left: auto;margin-right: auto;text-align: center\" cellspacing=\"0\" cellpadding=\"0\" align=\"center\">\n<tbody>\n<tr>\n<td style=\"text-align: center\"><a style=\"margin-left: auto;margin-right: auto\" href=\"https:\/\/3.bp.blogspot.com\/-lr_I8MATcmM\/UKZ-TkeFQ-I\/AAAAAAAAAKc\/DX77TkbXGUA\/s1600\/Cityscape.jpg\"><img decoding=\"async\" src=\"https:\/\/tradingtechnologies.com\/wp-content\/uploads\/2012\/11\/Cityscape.jpg\" alt=\"\" width=\"320\" border=\"0\" \/><\/a><\/td>\n<\/tr>\n<tr>\n<td class=\"tr-caption\" style=\"text-align: center\"><em>Image via M-Pics\/<a href=\"https:\/\/www.freedigitalphotos.net\/\" target=\"_blank\" rel=\"noopener noreferrer\">FreeDigitalPhotos.net<\/a><\/em><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p><i><br \/>\n<\/i><\/p>\n<div>\n<h3><span class=\"ez-toc-section\" id=\"just-a-little-history\"><\/span>Just a Little History<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div><i><i><br \/>\n\u201cWho am I? Why am I here?\u201d<\/i><\/i><\/div>\n<p><i><br \/>\n&#8211; Vice Admiral James Stockdale<\/i><\/p>\n<\/div>\n<div>\nA \u201cmultibroker solution\u201d can be broadly defined as a trading platform that provides the buy side with the ability to execute and clear with multiple brokers, preferably from a single screen.Over the years, there have been many reasons for TT to offer a multibroker solution. The beginning of the 21st century was a boom time for commodities and futures markets. During that period, the biggest challenge for a trader seemed to be how to capture a piece of the ever-growing pie, in an environment where trade volumes would go up for the foreseeable future. Even the<a href=\"https:\/\/www.marketswiki.com\/mwiki\/Refco\" target=\"_blank\" rel=\"noopener noreferrer\"> occasional bump in the road<\/a>\u00a0didn&#8217;t\u00a0seem to slow anyone down for long. The more relationships you had, the wider you could reach to gather in the bounty.<br \/>\n<a name=\"more\"><\/a><br \/>\nBut it was by no means an easy road. The barriers to multiple broker relationships were many:<\/p>\n<ul>\n<li>Some brokers could be accessed only via their proprietary single-broker offerings.<\/li>\n<li>Multi-asset, multibroker platforms lacked advanced futures trading functionality.<\/li>\n<li>Software vendors (like TT) had solutions that were \u201cbroker-neutral\u201d, but still required separate infrastructure for each broker.<\/li>\n<li>Each broker presented unique back- and middle-office integration overhead, especially with regard to Financial Information eXchange (FIX) protocol integration.<\/li>\n<\/ul>\n<div><\/div>\n<p>In spite of the costs and complexity, those firms with enough resources to apply to the problem simply forged ahead with handcrafted multiple-broker integration, sometimes supporting separate software solutions for as many as half a dozen different futures commission merchants (FCMs). When it came to the multiple broker club, many small or even mid-tier buy-side firms were left on the outside looking in.<\/p>\n<p>Over the years, TT has done a fair amount of talking about a multibroker solution. We made a couple abortive attempts at trying to bolt-on multibroker functionality to our existing system. But for the most part, TT focused its R&amp;D resources on expanding trader functionality and market access. Our 7x platform was solid and time-tested. In most cases, FCMs managed their TT infrastructures with only occasional guidance from TT. Yes, TT dipped its<a href=\"https:\/\/www.intriguing.com\/mp\/_pictures\/compdiff\/foot.jpg\" target=\"_blank\" rel=\"noopener noreferrer\"> proverbial toe<\/a> in the hosted-solution water with <a href=\"https:\/\/tradingtechnologies.com\/ttnet\/map\/\" target=\"_blank\" rel=\"noopener noreferrer\">TTNET<\/a>\u2122. But TTNET only aspired to provide the same type of TT infrastructure management that most FCMs were already doing\u2013basically a competent but cookie-cutter approach, with a few efficiencies gained due to shared infrastructure, best practices and proximity to TT support. Not much progress was being made on the multibroker front at TT.<\/p>\n<p>Then in 2008, the unforeseeable happened.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"consolidation-consolidation-consolidation\"><\/span>Consolidation, Consolidation, Consolidation<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><i style=\"text-align: center\">\u201cThere are only three things that matter when it comes to property:\u00a0<\/i><i style=\"text-align: center\">location, location, location.\u201d<\/i><br \/>\n<i style=\"text-align: center\"><i>\u00a0 \u00a0 \u00a0 &#8211;\u00a0<a href=\"https:\/\/www.nytimes.com\/2009\/06\/28\/magazine\/28FOB-onlanguage-t.html?_r=0\" target=\"_blank\" rel=\"noopener noreferrer\">Unknown<\/a><\/i><\/i><\/p>\n<p>The events of the 2008 crash are well known; we won\u2019t review them here. From our perspective, the crash brought a number of critical issues to the forefront:<\/p>\n<ul>\n<li>Broker risk: Anyone with just a single broker relationship now wanted two; those with two now wanted three, etc. On the other hand, those with six might cut back to five, or even four. It\u2019s no longer just about maximizing profits, but insuring survival.<\/li>\n<li>Regulatory risk: As an industry, we\u2019re still coming to grips with the impact of Dodd-Frank and ESMA regulatory changes. The demands that these changes are placing on FCMs and the buy side are a driving factor in<a href=\"https:\/\/www.advancedtrading.com\/the-buy-side-wrestles-with-the-oms-ems-d\/240009660\" target=\"_blank\" rel=\"noopener noreferrer\"> system consolidation<\/a>.<\/li>\n<li>Opportunity risk: Near-zero interest rates and reduced trade volumes mean FCMs are keeping a much tighter rein on which buy side firms are worth the cost and effort to support on a trading system.<\/li>\n<\/ul>\n<div><\/div>\n<p>At TT, we continued to talk with our end users about these issues. Internally, we had many debates and brainstorming sessions about how to attack various pieces of the new puzzle. About two years ago, the case for a multibroker application service provider (ASP) solution at TT became so compelling\u2013seeming to solve so many of the disparate problems with which our end users were being faced\u2013that we stopped trying, and started doing (apologies to Yoda): we decided to transform our current single-bank platform into a multibroker architecture, starting from the bottom up. So let\u2019s talk about what TT\u2019s multibroker solution is.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"what-is-the-new-tt-multibroker-solution\"><\/span>What is the New TT\u00a0MultiBroker Solution?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><i>\u201cIt\u2019s a little room in the front of the plane\u2026but that\u2019s not important right now.\u201d<br \/>\n&#8211; Leslie Nielsen<\/i><\/p>\n<\/div>\n<div><i><br \/>\n<\/i>Aptly enough,\u00a0we&#8217;ve\u00a0named our solution MultiBroker. We started by taking a new approach in TTNET, introducing an ASP model for MultiBroker that allows TT to fully manage and scale the trading infrastructure as trade volumes dictate. We are starting to take advantage of<a href=\"https:\/\/tradetalk.tradingtechnologies.com\/2012\/10\/leveraging-basic-tenets-of-cloud.html\" target=\"_blank\" rel=\"noopener noreferrer\"> cloud resources<\/a> to help scale the less latency-sensitive components of the system. We believe that an ASP approach will help us take any barriers to entry for our MultiBroker end users down to the bare minimum.Under the software covers, we made precise changes from end to end in every TT component to accommodate the order-routing demands of MultiBroker, while at the same time matching or exceeding the performance and feature set of our existing platform. Buy-side firms will be able to integrate with a single FIX interface across all brokers for back-office and compliance reporting. We kept the visible changes in X_TRADER\u00ae and the APIs to a minimum to keep the learning curve low for our current traders and to retain the clean and fast trading style for which TT is so well known.<\/p>\n<p>We are pretty proud of the end result. The MultiBroker solution has been routing live trades in our alpha environment since late summer. Early reviews from both the buy side and the sell side have been enthusiastic, and I am equally enthusiastic. As we move on to beta and ultimately to production in the coming months, you can track progress on our <a href=\"https:\/\/tradingtechnologies.com\/products\/initiatives\/Products\/MultiBroker\/\" target=\"_blank\" rel=\"noopener noreferrer\">MuiltiBroker<\/a> initiatives webpage, or in my future blog posts.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Image via M-Pics\/FreeDigitalPhotos.net Just a Little History \u201cWho am I? Why am I here?\u201d &#8211; Vice Admiral James Stockdale A \u201cmultibroker solution\u201d can be broadly defined as a trading platform that provides the buy side with the ability to execute and clear with multiple brokers, preferably from a single screen.Over the years, there have been [&hellip;]<\/p>\n","protected":false},"author":34,"featured_media":24637,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[16],"class_list":["post-24386","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized","tag-trade-execution"],"acf":[],"_links":{"self":[{"href":"https:\/\/tradingtechnologies.com\/wp-json\/wp\/v2\/posts\/24386","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/tradingtechnologies.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tradingtechnologies.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tradingtechnologies.com\/wp-json\/wp\/v2\/users\/34"}],"replies":[{"embeddable":true,"href":"https:\/\/tradingtechnologies.com\/wp-json\/wp\/v2\/comments?post=24386"}],"version-history":[{"count":0,"href":"https:\/\/tradingtechnologies.com\/wp-json\/wp\/v2\/posts\/24386\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/tradingtechnologies.com\/wp-json\/wp\/v2\/media\/24637"}],"wp:attachment":[{"href":"https:\/\/tradingtechnologies.com\/wp-json\/wp\/v2\/media?parent=24386"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tradingtechnologies.com\/wp-json\/wp\/v2\/categories?post=24386"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tradingtechnologies.com\/wp-json\/wp\/v2\/tags?post=24386"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}