A Low Latency Financial Cloud That Works For Traders


Can It Really Be That Complex? FCM360 Demystifies the Cloud Hosting Environment.



WHY IS THE FINANCIAL CLOUD SO CONFUSING?

Cloud computing is one of the most mysterious enterprise technologies introduced in the past decade. It can mean many things to many people and rarely has a unified description. The term “Financial Cloud” which is becoming increasingly used by large financial institutions such as exchanges and banks  has equally  proven to be a mystery. Several large financial exchanges and financial services companies have recently launched their Financial Cloud offerings in hopes of capitalizing on this growing industry.

When digging into the primary purpose of these newly launched cloud products, you will find that they are geared towards providing proprietary services to the company’s clients and are not suitable for more than a limited range of purpose. The other issue that that the financial cloud providers admit that their cloud solutions are aimed at middle and back office functions that cannot replace bare metal machines that host high frequency trading applications, algorithmic trading or low latency market data and news feeds. This is very confusing to end users and organizations looking to incorporate third party cloud services into their existing trading infrastructure. Most users of these services cannot exactly explain what these financial cloud products offer to improve or enable trading and have been forced to continue building and managing their own infrastructure solutions in-house. The major issue at hand is that today’s financial cloud offerings  do not actually solve problems for today’s growing number of electronic traders that need access to multiple execution venues, market data and low latency news feeds. For the financial cloud to work, there needs to be an availability of all services ready to be connected and turned up quickly and easily.

MAKING THE FINANCIAL CLOUD WORK FOR TRADERS – THE KEY ELEMENTS

In order for the financial cloud to work, traders need to know that the service meets their requirements. The financial cloud can meet the needs of the trading community if the following requirements are met:

  1. Location – There must be a disclosure of location and proximity to exchanges, liquidity venues and low latency market data and news feeds. Traders need to know the actual latency offered by the cloud trading infrastructure. This has been one of the key tenets of building out trading systems for the past several years and a major delivery failure of the current financial cloud model.
  2. Low Latency  Low latency and cloud are two terms that have not been synonymous in the past. According to trading clients, low latency is a must. Low latency can be defined in relative terms but it comes down to two major factors: network latency and machine infrastructure latency. If a trading house is looking to completely replace a larger and more expensive bare-metal trading infrastructure, they need to ensure that the networking and processing latency is similar or better than their existing deployment. The common network round trip “ping” test and order “time stamp” latency must yield impressive results.
  3. Multiple Connectivity Options – There must be a wide array of connectivity options to exchanges, ECNs, banks and market data/news providers. When investing in infrastructure, the trader needs to know that the network can connect seamlessly to trading counterparties in a cost-effective way and one that lowers the risk of not having options to trade multiple venues.
  4. Turn-Key – The financial cloud  must be turn-key and provide access to all of the common components that comprise a trading infrastructure. The cloud provider must be able to emulate a traditional hosting model that visually removes all of the complex individual components that make it difficult for a client to turn up services when they need them the most.

IS ULTRA LOW LATENCY AVAILABLE ON THE CLOUD?

If you speak to those in the know in the financial hosting business, they will rarely mix the words “low latency” and cloud. Until now this has typically been true. With advances in operating system, network and processing technologies, the basic cloud fabrics responds faster than before. It requires a carefully constructed solution that  takes into consideration all of the pieces of the hosting fabric and how they react to one another ensuring latency and networking roadblocks have all been mitigated. It is possible to run a low latency cloud in production.

As members of the financial services community expand their operations, they will seek the cost-effective and scalable promise of the financial cloud.  Many traders are also leaving large regulated entities such as exchanges, ECNs, banks and insurance houses to seek trading opportunities elsewhere which is creating and increasing need for an affordable yet transparent cloud hosting solution. At FCM360 decided to create such a solution for the trading community which has created clarity in the decision-making process. It began with a goal believing  that a cloud solution should  meet all of a trading firm’s requirements.  With multiple production sites running in major cities around the world, the system is currently hosting trading operations for market makers, hedge funds, low latency trading platforms and liquidity aggregators as well as providing connectivity to over 50 exchanges, ECNS and brokers.

FCM360 provides Low-Latency Trading Infrastructure for Automated Trading, Algorithmic Trading, High Frequency Trading as well as Managed Trading System Hosting and Exchange Connectivity. By utilizing FCM360 services, our clients are allowed to focus on their core business which is building client relationships, trade execution services and generating revenue. By having turn-key technology solutions for your trading clients you will enhance the recognition and value of your brand.