Welcome to Trading Tech Talk. The program where we break down all of the amazing technology that takes your trades from the click of a mouse to the clearing house and back again. Each episode we'll break down the latest developments from the world of trading tech, bring you exclusive conversations with industry thought leaders, answer your pressing technology and much more. If it involves the tech that powers your trading, then you'll find it on Trading Tech Talk.
Trading Tech Talk 63: What the Heck Is a Smart Router?
CTO Interview: Today we feature special guest co-host Peter Maragos, CEO, Dash Financial.
Catching up with Dash:
When Peter was last on Dash had just acquired the LiquidPoint business from Convergex with the help of private equity firm GTCR. Now they've just partnered with Flexpoint Ford, another PE firm. What was the impetus behind the second transaction? Dash has an impressive suite of diverse products and services - smart order routers and algos, the Dash360 analytics platform, trading workflow tools, an options ATS and even human traders. What are the upcoming projects/initiatives at Dash? Peter's views on crypto trading Hot Topics in Tech: Smart Routers
Today's topic was inspired by the following listener question: Question from See16: Can you please do a deep dive into smart routers on a future program? They are the secret sauce of the market these days but no one really seems to understand how they work. Shedding some light on the otherwise dark world of routing would be a great service. Smart Routing Deep Dive: Quite a few things happen after you hit the trade button in the options market - probably much more than most people realize. Your order has to get routed from your broker/execution platform to the exchange. But it's not a simple path. That's where smart routers come in. What is a smart router? What do they do? What makes them smart? What are the different rules/filters/configurations that most smart routers have to consider? - NBBO, exchange fees, size, exchange pricing model, PIP auctions, payment for order flow rates, etc. What about resting orders? Are the smart routers constantly monitoring them and rerouting if necessary? Why do we need them in the options market? How do options smart routers differ from equity smart routers? Why have smart routers become so controversial in the options market? Spreads: This is the Achilles heel for many "smart" routers since every exchange has its own spread book and they don't talk to each other. So you could easily work a spread order that lines up on one exchange but, because your order was routed to a different spread book, your trade isn't filled. How do we overcome the spread routing issue in 2018? Is it a tech problem or a regulatory problem? Final thoughts/takeaways on smart routers? The Inbox: Listener questions and comments
Question from Nikes T: Hey Options Insider! Love the network particularly the tech talk. We need more episodes! On an upcoming show do you think you guys could talk about why dark pools don't exist in the options market? Is it a tech limitation or something else? Question from LaLaLad: Does block chain have any practical use on the trading front or is it all just back office stuff?
Trading Tech Talk 62: Exploring the Nexus of Machine Learning, AI and the Options Markets
Mark is joined by co-host Matt Amberson, Principal at Option Research & Technology Services (ORATS).
CTO Interview: Our guest today is Michael Mescher, Founder of Gammon Capital.
What is Gammon Capital? You've talked a lot about the dangers of selling volatility and how short vol managers aren't worth their fees. What are your thoughts on the maelstrom of the past week? How have your funds fared over the past week? Machine learning is a hot buzzword these days, but what are some of the practical applications that you're seeing in the financial markets right now? Is it ready for prime time or still in the nascent phase? Unsupervised learning/ fundamental strategies? Supervised learning / quantitative strategies? Classification vs. Regression problems Hiring machine learning specialists vs. Products specialists 90% of the world's data was created in the past two years. Is that an opportunity or a terrifying statistic? Testing models on out-of-sample data vs. carefully constructed back tests? Should managers be concerned that the robots are coming to take their jobs and their clients? The Inbox: Listener questions and comments
Question from BLAL9 - What do you see as the outlook for AI and machine learning in the financial management space going forward? I see a lot of smoke but is there much fire? Are there many funds currently using it to generate alpha right now? Question from Tonc - What are the best ways to invest in blockchain right now? Question from Mark Kalis - How are comps getting the edge on us in trading? Is it just pure correlation trading? Comment from tDok3 - No debate to be had there. It's a simple & foregone conclusion. Higher fees ==> lower participation perhaps goal for CB market manipulation
In response to tweet: Are exchanges shooting themselves in the foot by continually hiking market data fees? Question from See16 - Can you please do a deep dive into smart routers on a future program? They are the secret sauce of the market these days, but no one really seems to understand how they work. Shedding some light on the otherwise dark world of routing would be a great service.
Trading Tech Talk 61: Tackling Market Data Fees, AI and More
Today we have special guest co-host Rob Brogan from Flextrade.
Hot Topics in Tech: What's going on in fintech?
NYSE wins approval for 'speed bump' in trading Bloomberg is taking a shot at the New York Stock Exchange (again) Exchanges becoming tech firms Machine learning is transforming investment strategies for asset managers
Trading Tech Talk 60: Talking Buy and Build with Itiviti
CTO Interview Featuring Jesper Alfredsson, President Americas at Itiviti.
What is Itiviti? The history of CameronTec Who is the target market? Finding the middle way for infrastructure expansion Don't spend time on the plumbing Recent upgrades, including smart order routing for options orders Hot Topics in Tech:
The tough new cybersecurity rules in New York Risk managers under pressure to cut down on post-crisis spending Hedge funds adopt novel methods to hunt down new tech talent
Trading Tech Talk 59: Finding New Market Wizards with FundSeeder
CTO Interview with Jack Schwager: Author extraordinaire and now co-founder of Fund Seeder. Mr. Schwager is the author of Market Wizards, Hedge Fund Market Wizards, A Complete Guide to the Futures Markets: Fundamental Analysis, Trading Spreads and Options (and the second edition just hit store shelves!)
Was he surprised by the reaction to Market Wizards? How did that book come about? His new project in the trading tech space: FundSeeder What is FundSeeder? How does the funding process work? Do traders have to reveal their secret sauce in order to receive funding? Hot Topics in Tech: What is on our radar from a tech perspective?
Tech firm creates Trump monitor for stock markets. A London-based Fintech firm Trading.co.uk is launching an app that will generate trading alerts for shares based on comments made on social media by Donald Trump. Launching an open-outcry trading floor? How very 21st century.Box Options Exchange is building the first new trading floor in Chicago in decades - Boyle expects to attract traders who prefer open outcry for big orders and keep them with a more efficient 21st-century floor model.
Trading Tech Talk 58: Can AI Hunt Rogue Traders?
Hot Topics in Tech. Today we are featuring Alexander Lamb, Head of Business Development at The Technancial Company. Alex was previously a guest in March 2016. (You can access that episode here.)
Risk Management and AI: effective or ??? Its penetration into the business world has brought with it new services which aim to help automate and speed up a range of activities, including financial risk management. Wall Street next tech frontier is hacking into emotions of traders. Banks have already set up big-data teams to harvest insights from the terabytes of customer information they possess. Now they are looking inward to see whether they can improve operations and limit losses in their biggest cost center: employees. Tech is driving consolidation in the exchange space. CBOE Holdings Inc., agreed to acquire Bats Global Markets Inc. for about $3.2 billion to expand into stocks, ETFs and currencies trading. Exchanges defeat appeal of U.S. high-frequency trading lawsuits - A federal appeals court on Friday rejected an investor's attempt to revive lawsuits accusing major U.S. exchanges of selling early access to market data to high-frequency traders, the subject of Michael Lewis' 2014 best-seller "Flash Boys." The Inbox: In which the listeners take control
Question from Andrew Simmons: There is lots of acronym soup in trading tech. Two terms I have heard bandied about quite a bit are EMS and OMS. Can you explain these terms and maybe their similarities or differences? Question from JVigs: Are there any independent third party services I can use to analyze my margin and options buying power? This seems like a bit of a dark art these days in the options market. I do not really agree with the numbers generated by my broker and it would be nice to have some data in my corner. So much effort is devoted to trading in milliseconds but this important part of the market remains relatively untapped. Recommendations please. Great hit with Howard from StockTwits. Keep it up.