MarketXS, a leading supplier of real-time market data technology and trading solutions, today announces that it has signed a letter of intent with Progress Apama, the market leader in algorithmic trading.
The MarketXS - Progress Apama partnership aims to deliver a standard version of Progress Apama's algorithmic trading engine to mid-sized financial institutions, as a functional component in the hosted market data and trading infrastructure delivered by MarketXS. In a next phase MarketXS and Progress Apama will also deliver a fully integrated trading solution specifically designed to help clients achieve best execution. The obligation to deliver best execution to clients is one of the main consequences of the MiFID directive coming into force in November 2007.
The algorithmic trading services will be offered in two versions. A limited set of features including "pair trading" will be bundled into every MarketXS trading terminal. A more sophisticated version, giving access to a set of predefined algorithms which can be fine tuned by traders, is made available on an optional basis. The Progress Apama algorithmic engine is fed with real-time market data from the MarketXS Finance Engine, and trades generated by the engine are directly routed to their destination via MarketXS TradeNet, the order routing network of MarketXS. Delivered in the hosted MarketXS market data and trading infrastructure with zero footprint at the customer site, the combined MarketXS - Progress Apama offering frees customers from complex integration projects, enabling a quick time to market.
MarketXS and Progress Apama have seen the demand for algorithmic trading in the trading community growing and becoming an increasingly accepted practice among mid-market clients also. Says Ronald Kleinveld, Chief Operating Officer of MarketXS: "Most tier one banks and investment firms already offer their algorithms to the market place. The joint proposition of Progress Apama and MarketXS now also allows the mid-tier institutions to offer an algorithmic trading service to their customers, without the need to build an in-house infrastructure."
The collaborative effort of MarketXS and Progress Apama will also be directed at helping financial firms to maintain a best execution policy. Already a hot item in the broker world, this will become even more important when the MiFID regulation comes into force. The process includes the real time comparison and evaluation of streaming data flows in order to decide where to execute orders. Further, not only prices of shares, but also probability of execution and settlement costs will have to be taken into account in order to establish the venue with best execution. With a proven track record in the areas of algorithmic trading and intense real time event processing, Progress Apama's event engine is the ideal technology. Combined with MarketXS' market data distribution, order routing and connectivity, the collaboration offers a complete and sophisticated best execution solution with virtually no impact on the IT infrastructure of the customer.
Kleinveld continues: "Where the number of trading venues increases, as everyone is expecting to happen under MiFID, the challenge of achieving best execution, and being able to prove it, will be a fierce one. It requires costly connectivity both on the market data and the trading side, and complex real time event processing. As a hosted service the combined technology of Progress Apama and MarketXS is ideally suited to effectively address this challenge. Our clients are showing a keen interest in the service, and we are happy to offer them a state-of-the-art solution by joining forces with the market leader in algorithmic trading field."
John Root, Branche Manager Finance of Progress Apama in The Netherlands, comments: "The exponential growth of the electronic trading market continues to create new opportunities and challenges for today's market leaders. Algorithmic trading strategies are the way forward for investment firms and banks. Progress Apama is excited at the prospect of working with MarketXS to provide their customers with compelling algorithmic trading strategies and adherence to regulations at the same time."