Mostly… fixed income and cross product eTrading

September 27, 2007

Thomson … where next?

Filed under: 2015, etrading, Nuts and Bolts, OMS / EMS — holky @ 8:28 am

A modest proposal to Thomson FinancialSince the Reuters acquisition – written by the “mostly” roving reporter John.

I suspect that Thomson is suffering from a slight dose of corporate indigestion. In a fast moving world can Thomson wait before making their next move? Let’s just suppose that they decide to become more of a force in the buy-side connectivity space. There are few options available out there but there is one strategy that I think could completely overshadow the Fidessa acquisition of LatentZero.

There are several parts to the strategy:

Step One

Make a strategic investment in Thinkfolio. It’s the leading buy-side Fixed Income modelling tool. The management are strong, experienced and retain stakes in the business. Don’t buy the whole thing – give them enough money to motivate but not too much to reduce incentives.  – Can this be done at a reasonable price? Absolutely.

Step Two

Take the Autex business unit and combine with Tradeweb.

I have heard rumblings that this is in progress anyway. It’s a good move.

Tradeweb is ugly as sin to look at but it’s a product that offers genuine value to the buy-side dealer. Roll that into Autex. Why? Try and get Tradeweb into more shops that may be mainly equity but do have Autex. By now the big players are using Tradeweb so it’s mopping up the remnants that is left.

Can this be done at a reasonable price? Reorganisation within the firm – of course.

Step Three

Buy Charles River Development. This is a no-brainer really. CRD have moved beyond their roots in the US to being a global business. But as with most buy side independent vendors they lack critical mass – there is not enough strength in depth. They have been in play for a while as an acquisition target so why not make Lambertus an offer?

Can this be done at a reasonable price? Probably.

Step Four

Buy Flextrade. This is the leading broker neutral EMS. Functionally excellent. The firm has done really well to offer a cross product offering but the firm has a number of weaknesses. One is the technology: C++ on UNIX with X-Windows, in house messaging layer, in-house FIX engine. It can be argued that this could do with a refresh.

Can this be done at a reasonable price? Wildcard.

So what do Thomson do if they buy this mix of products?

1. Work on integrating Thinkfolio and Tradeweb – all FIX based but in an elegant integration.

2. Sell the other parts of the Autex/Thinkfolio/Tradeweb trinity to firms that have less than three in place (maybe not many new opportunities but worthwhile)

3. Get CRD and Flextrade to work on full functional integration

4. Look to provide the next generation of these products in an AJAX based front end (something like this)

5. Be responsive to client requests.

Disclosure (from the author, John) – I do not have any financial interests in any of these firms, I don’t own shares, options or any other instruments in these firms. I do know various people at these firms – this article is not based on any non-public information.

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September 14, 2007

Bloomberg insults its users!

Filed under: Nuts and Bolts — holky @ 8:57 am

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I hear they’re working on other insult ‘states’, to follow in the next few weeks…

Multi-asset Portfolio Management Systems

Filed under: etrading, OMS / EMS — holky @ 7:54 am

Aite Group report says that multi-asset portfolio systems — those with the ability to process all types of assets including non-listed exotic instruments — are now attracting greater interest from buyers, as investment managers and particularly hedge funds, seek derivative product capabilities in line with their increasingly diversified strategies

 “Even if buy-side firms are not currently engaged in a high volume of over-the-counter trading, they are aware that down the road, a change may take hold,” said Denise Valentine, senior analyst at Boston-based Aite. “To that end, buy-side firms are querying technology vendors on their solutions’ ability to process these instruments today and in the future.”

September 13, 2007

Community

Filed under: blog, Nuts and Bolts — holky @ 12:25 pm

So Finxextra launches professional network , allowing bona-fide technologists to register and contribute.      

For a blogger there appears upside in terms of distribution, with your headline going out with each Finextra update it will be far easier to go from zero to some readers, and your words may gain apparent weight when official journos have gone to town to integrate your topic into the news they are delivering.  But on the flip side I wonder how Finextra will handle conflicts of interest when one of their bloggers says something anti one of the Finextra sponsors?  (I don’t know, are there particular t&c or does anyone otherwise know?).    Are there also linkedin/facebook type func’s on this?   with a community limited to just bona-fide punters then is this the “bloomberg messaging” moment for the technologist community?   ..or is everyone already facebook’d or ning’d out and looking for a place to consolidate theirspace ?

September 12, 2007

Exchanges rule … ok?

Filed under: 2015, etrading — holky @ 1:15 pm

Aite says (via finextra) that despite the growing number of ECNs, dark pools, and ATSs, the traditional exchanges will retain a large slice of US market share for equity trade vol…

.Despite the growing number of ECNs and ATSs, over the long-term success will follow liquidity and many of the smaller players will simply go out of business, says Aite. The few successful remaining ATSs will likely find themselves being bought up by the major exchanges such as Nyse Euronext and Nasdaq.

Surely that’s consistent with the argument the exchanges make whenever pitching for business (new or retaining); the “we’ve done this stuff for years. Sure we will make changes to make us more competetive and so on, but who do you want to trust to be there for the longer term?

September 11, 2007

fidessa/latentzero – why should you care?

Filed under: etrading, OMS / EMS — holky @ 5:11 am

Trader magazine looks at the fidessa/latentzero tie-up  here

Why do we in the fixed income space care?

Latentzero hooked up with fidessa because they needed a datacentre, a hosted offering, and a decent FIX connectivity hub – all of which fidessa have in spades. Fidessa see latentzero as a way to break out of their existing shape; a great presence among the UK equity market participants, but not so hot in Europe (kept at bay by GL) and even less of a footprint in the US.

Of course latentzero taking over more desktops pays dividends to fidessa in terms of getting their fidessa nuts and bolts onto the punters desktop….  and that’s where Reuters-Thomson and Bloomberg really need to watch out. Once latentzero-fidessa are on your desktop, why are you going to pay to get your market data through one of the current providers and also have to pay you tech guys to pipe that data into your desktop?

Yes were not talking about swaps or fixed income right now, but firms making big decisions about global licenses are surely more likely to side with a solution that on the face of it provides an absolutely nailed and integrated system for at least one product area (equity) and at least “talks the talk” of other products, especially if decent-name dealers are offering point to point distribution in those products in the (even if marketing speak) forseeable future….  Should we expect this to be adopted in spades if point to point means we are not so constrained by gui too (not transaction building blocks but breaks out of the existing constraints?)… What’s the alternative? Deploy a fragmented fixed income style environment of apps here and there and expensive desk jockeys rekeying things between them rather than really adding value somewhere else in transaction terms?

My unscientifically conducted “survey” reveals expectations are for latentzero to become the dominant part of the merged company over the next 18 months.    How are Bloomberg and Reuters-Thomson planning to fight this long term to stay on your desktop?

September 6, 2007

Another one bites the dust

Filed under: 2015, etrading — holky @ 9:34 am

well, not another one really, but BSE is at least one example of a new (equity) etrading venue being switched off because it couldn’t attract market share. 

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