18 October 2017
Panagiotis Charalampous

Insights in Trading Technology

Panagiotis Charalampous - cTrader

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Trading Platforms and the API Economy.

06 October 2017  |  3766 views  |  0

Extensibility is one of the most important aspects of software design. In an increasingly connected and interdependent world, this design principle becomes more and more of a must for any software system. Extensible software architectures where traditionally designed by the implementation of application programming interfaces (APIs). In order to create extensible software, programmers had to allow other programmers to access their code in a controllable way. This was achieved through the use of APIs. Contemporary software platforms leverage their capabilities by exposing and allowing the reuse of their internal functions through APIs. All big players in the current Web dominated era, like Google, Facebook, Amazon, Twitter and others  offer APIs to their platforms. Trading platforms could not be excluded from this paradigm shift.. As trading becomes more sophisticated and complicated, the use of trading APIs becomes more and more mainstream.

The Importance of APIs

APIs are usually used from software developers to expose their software system structure and functions to other software developers. The benefits of the APIs are most of the times obvious. They are used for data sharing, system integration, system extension and many other purposes.  An important aspect of APIs is that they can be used to handle cases unknown at the design time. On the side of the API provider, the business benefit is the ability to integrate the software system into different business processes and leverage its use, gaining this way increased exposure and system use. On the hand of the consumer, the benefit is that he can reuse functionality built by others and develop added value without the need to reinvent the wheel. Through the use of APIs, such cases ought to be handled without the need of modification of the internal system. Moreover, APIs are used as a tool to build win-win relationships and avoid unnecessary competition. Different business entities do not need to get into an unnecessary elimination war, since they by using an API they can develop side by side different components of a larger system.

The Use of APIs in the Trading Industry

Trading industry and trading software have gone through some major transformations during the last years. As the technological landscape became more and more complicated and as new technologies were constantly introduced, like the web and mobile devices, brokers were forced to move from developing proprietary incompatible trading platforms to using third party widely used software. This allowed brokers to manage the technological complexity as well as reduce their development costs by outsourcing the trading platform development effort to third party providers, as well as to provide a common user experience to traders.

With the rise of trading platforms  and the elimination of proprietary development, the need for APIs became more prominent. Brokers needed to offer value added services to their clientele, hence they had to to accommodate custom client needs .But the development was not made in-house any more. Therefore trading platforms had to provide APIs to accommodate those needs.

Today every self respecting trading platform offers an API. No matter how well a trading platform has been designed and regardless of the number of features it offers, it is impossible to cover all brokers and traders needs and imagination. Therefore, it needs to provide ways for brokers and traders to cover these needs through APIs. A good API is not only a sign of a good trading platform but an indicator of potential growth.

The Future of APIs in Trading

Trading industry is a fast evolving and rapidly expanding industry. Volumes of trillions are traded every day. Combining this fact with the accelerated transformations in technology and the increased technological offerings, more and more needs appear and numerous business opportunities arise day by day. People trade at home, on the go, through a variety of devices and using a plethora of strategies. Traders need versatility and speed and brokers need flexibility and competitive advantages. Both of them need intelligence. Under these circumstances APIs will become even more important in the future world of trading. Brokers will always try to differentiate themselves by providing niche offerings to their clients. On the other hand, traders will always try to stay ahead by using sophisticated trading tools. All of this can be achieved by extending already advanced trading platforms through APIs and providing unique services to both brokers and traders. Have you ever thought for example that you would be able to trade through a messaging application? Well, now it is possible with the use of an API!

Conclusion

The term API Economy is a term that has been trending lately and it is used to describe the interconnected economical relations in the current digital world. In the trading world API economy will be in the center of the next major developments. Software platforms that have the API thinking as part of their vision and in the core of their strategy will dominate the trading software industry. API enabled platforms will create unlimited opportunities for innovations and new business. Traders will become more demanding of their trading platforms and those who will cover their needs will benefit from these new trends. Platforms which will provide more sophisticated and advanced APIs will be in the centre of this new landscape and those familiar with them and their offerings will maximize their opportunities in this emerging environment.

 


TagsTrade executionOpen APIs

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job title Head of Community Management
location Limassol
member since 2017
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Head of Community Management at Spotware, the company behind cTrader trading platform. Expert in technology management, innovation and disruptive software solutions.

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