CEOs Weigh in on Market Data Technology Trends
It is important to understand how value can continue to be created with the overwhelming influx of data entering the market today. Data and information technology is about more than accumulating that data but also having the correct software to properly deliver it to traders.
Devexperts CEO, Michael Babushkin, sat down this year with Baturalp Candemir, CEO of TEB Investment, Tsachi Galanos, Co-founder and CEO of Bookmap Ltd., and Tankut Taner Çelik, General Manager of Ziraat Portföy, at the Turkish Capital Markets Summit in Istanbul, Turkey.
There, in response to a question about how we create value with the data and information technology related to data processing, Michael had this to say:
“As a technology vendor, we work with data from two sides. First, as a market data vendor, we collect data from exchanges and news agencies and we store it, process it, put it into the cloud, and at the same time — cause we provide trading platforms — we work with the data on the UI side.
Historically there was only one trend in the data world. There is more and more data available to traders every year and there used to be a phrase: “I need more data as an active trader,” or “there is never enough data, you can’t give me too much data.”
“there is never enough data, you can’t give me too much data”
Well, in fact, as we are in the world where data is becoming generated multiple times over, from one year to the next, we are ending up on a presentation level in a situation when, in fact, there could be too much data if it’s not being presented well.
“in fact, there could be too much data if it’s not being presented well”
If it’s not being filtered well, if it’s not being directed in the right way, to the right customers, at the right moment, it becomes too much. If you just have direct access to all of the data that any exchange can provide, and are an inexperienced trader, then you simply will not know what to do.
There are just too many factors, too many data points, for the average trader to sort through. At the same time, the more data points you have within the right applications, within the right software, the more qualified decisions you can make as a trader. So, the value-added proposition here is to actually provide better software tools to traders that can continue to be driven by more and more data every year.”
When asked the same question, Tsachi Galanos, CEO of Bookmap ltd. had this to say:
“If I’m looking into trends, I look from the perspective of the leading exchanges in the US. The main reason is that a lot of the changes that we see in the world are based on the leading exchanges. Recently, I was in contact with one of the managers of market data in CME, the largest derivatives exchange.
“a lot of the changes that we see in the world are based on the leading exchanges”
He sent me a brochure, and when I opened this brochure, the first sentence read: CME to provide more transparency to all of its users, to all of the traders. This is a big message, and I’m all behind it, so the biggest exchange is focusing on transparency. And I thought, what exactly is this transparency? What do they refer to in this brochure? So, we looked at the market data.
Two factors have changed. Two years ago, if you wanted to have a depth of data from the CME, you would get up to ten level depth. So, you see the price, and you see 10 levels on each side. Today, if you subscribe to CME, you could see the full depth. All of the levels, all the orders sent to the exchange, this information is transferred to the end-users. To all users. So, as their retail or non-pro user, you have access to all of the traits that an exchange receives, which is a huge and very powerful issue.
“Two years ago, you would get up to ten level depth. Today, if you subscribe to CME, you could see the full depth.”
The 2nd factor is the format of the data. Until recently, the format was based on market by price, which is where you get the levels and the total size at each price level. Now you could see the individual orders. It’s called order by order or market by order where you can see the size of each order that is being sent to the exchange. This is good, for example, if you want to see your place in the queue or you want to develop sophisticated or advanced add ONS for indicators or strategies that are based on the size of the orders. These changes happened recently and improved the transparency for the whole market.
Other than that, we see trends that are more and more about analytics, as Michael mentioned. One of the reasons is because of the infrastructure. We see better PCs, more CPUs. They are stronger and have more RAM, and everything enables the processing of much more data. This comes together with wider bandwidth and also more processing capability and storing on the server-side. So, all these advancements allow for processing much more data and creating much better tools to provide more value to the traders.”