FEATURE
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impact of debt and equity markets all play a huge role on currencies and trading strategies,” says Lovas. “It’s the interplay of these variables which from a technology point of view, combine multi-asset historical market data, captured executions and news. Te analytics can leverage a variety of mathematical models such as linear regression and correlation.”
Improving trading performance
For the software industry, the realization of how important analytics are to the trading process is clearly good news and consequently there is a growing number of toolsets and applications available for firms to improve their trading performance. “At DealHub we are increasingly being asked to help customers get a real-time, holistic view of flow across all their trading platforms and venues,” says Peter Kriskinans, Managing Director of DealHub, a UK-based provider of trading software.
Peter Kriskinans “Tools that give banks a granular view of latency
across their trading operations allow them to optimise the performance of individual components and monitor that performance through the trading day, acting on bottlenecks and inefficiencies to minimise the impact on profitability.”
focus on data trade capture and the fact that data volumes are increasing that there will simply be too much data to analyse?
“Tere is a lot of data to capture but it is a relative thing,” says Lovas. “FX data is still a fraction of the options market. In the US alone there are 200,000 options contracts on any given day but the firms that trade in the FX market are not really the same as those in the options market so there are no significant concerns about the size of data. Te biggest challenge for the FX market is the lack of centralisation. Co- location is of less benefit than it is in other asset classes so you have to look for other ways to shave off latency such as better technology.”
High-performance FX trading firms can also deploy deep dive analytics for their risk management applications. “Managing historical VAR as a means to forecast transaction risk, understanding historical/ real-time volatility, monitoring directional trends (technical analysis), incorporating macro-economic
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“Tis means combining millions of historical and real-time data points to provide a live, updating view of risk and performance across their trading operation. Te result is insight that can help reduce risk, optimise trading infrastructure and improve client service far more efficiently than traditional back office systems and processes. An increasingly important overlay to this live picture of trade-flow is latency monitoring. Tools that give banks a granular view of latency across their trading operations allow them to optimise the performance of individual components and monitor that performance through the trading day, acting on bottlenecks and inefficiencies to minimise the impact on profitability.”
Aggregated, real-time insight into trade flow across interbank and e-commerce channels allows traders and sales teams to identify flow and trading patterns by individual customers or customer groups, enhancing decision making through the trading day and improving client service and relationship management, says Kriskinans.
“With a live view of performance data from eCommerce platforms, operations can be managed far more profitably, with real-time understanding and notification of critical flows and events such as price delays or trade rejections allowing proactive optimisation and resolution of issues. Overall, banks with a live overview of performance and activity across their trading operations are able to act more quickly
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