Commoditizing Low Latency Trading: Managed Services Makes a Splash
Report Summary
Commoditizing Low Latency Trading: Managed Services Makes a Splash
Managed trading platforms are gaining ground among firms that do not consider low latency trading infrastructures to be competitive differentiators for their business, expediting the process of moving into new asset classes and geographies.
Boston, October 14, 2010 – A new report from Aite Group examines managed trading solutions—particularly the trends, drivers, and priorities impacting the market for these solutions. It also looks at their customers' priorities, trading directions, and perspectives on the viability of the offerings available. The report is based on Aite Group interviews with 48 firms engaged in electronic trading (nearly half focus specifically on high frequency trading), and discussions with seven vendors.
While high frequency trading firms continue to gain share in markets that can digest their trading activity, mid-market broker/dealers, quantitative strategy managers, hedge funds, and traditional asset managers are forced to play keep-up in order to acquire adequate fills for their own portfolios. These market participants may not need sub-millisecond latency to support their trading activity, but certainly require single-digit-millisecond response times in order to stay “in the game.” Because of this, managed trading platforms are gaining ground among firms that do not consider low latency trading infrastructures to be competitive differentiators for their business. In fact, survey participants cited low latency market data as the primary functional requirement for managed trading solutions; it is also the primary decision point in vendor selection. Access to global markets and multiple asset classes are other significant requirements.
“Managed trading solutions are primed to win over firms that currently build much of their own technology,” says Adam Honoré, research director with Aite Group and author of this report. “Further, demand for these products will increase as more hedge funds and traditional asset managers?which typically lack the resources to build their own solutions?adopt managed trading infrastructures.”
The report profiles the following vendors of managed trading solutions: ACTIV Financial, Fixnetix, FTEN, Mantara, NYSE Technologies, SunGard, and ULLINK.
This 40-page Impact Report contains 16 figures and four tables. Clients of Aite Group's Institutional Securities & Investments service can download the report.