Making Fast Even Faster: Winning the Electronic Trading Race

To improve their overall time, triathlon athletes must focus on perfecting their transitions between legs of the race. When achieving the best performance within electronic trading, speed and transparency at certain moments is also essential.

Making Fast Even Faster: Winning the Electronic Trading RaceBy Oliver Bradford    March 8, 2017      Thinking

The importance of timing in sports is indisputable, especially in competitions that lead to close finishes or require multiple disciplines. A triathlon, for example, is made up of three legs: swimming, biking, and running, with two changing transitions in between. Triathletes will often focus on training for individual disciplines in order to improve their overall times. However, it is not until athletes examine the complete picture that they can really determine where specific improvements need to be made.

It’s rare to complete a race without mistakes: swimming in a crooked line, losing a bike in transition, getting stuck in a wetsuit, struggling to put shoes on numb feet... the list goes on! While some of these mistakes fall within the same leg of the race, together all of these hiccups invariably impact an athlete’s overall time.

When the whole race is timed, analysis can be done post-race to work out what happened within each leg and how an athlete’s performance compared to their competitors’. Athletes frequently make their mistakes or lose time during the changing transitions between legs; these critical sections can win and lose races. Without precise timing of each leg and the transitions, athletes would be lost and confused when concentrating on which skills to improve. It is most effective to focus on specific areas to make small tweaks and improvements in equipment, fitness, and strategy. This idea of marginal gains facilitates a stronger result overall and makes fast even faster.

In electronic trading, the timing of events and transparency into what happens as a trade order passes through systems and exchanges at speed is also paramount. However, in this environment, the consequence of losing is putting millions of dollars at risk and corporate reputations on the line.

If clients complain that orders are being executed slower, the best way to distinguish what is happening is to monitor these events, especially during internal database hops, which are essentially the triathlon transitions of electronic trading. By determining exactly what is impacting the performance and then improving it, it is possible to generate more revenues and executed trades.

In both triathlon and electronic trading performance, the timing and chronology of events is critical. Yet, it is the complete breakdown of events, hop by hop, which provides the information necessary for fine-tuning performance. Recently in Europe, this need for a precisely recorded chronology of trade events down to the microsecond is being introduced with the MIFID II regulation coming into effect in 2018.

At Corvil we have seen the trading landscape change from a pure focus on a speed arms race to prioritize transparency and information on speed, which are now becoming more important than speed itself, as the marginal gains become smaller. In order to win the race, you need to improve your time– so while speed is paramount, knowledge of speed (whether it be transparency into triathlon transitions or database hops) is even better.

Making Fast Even Faster: Winning the Electronic Trading Race

Oliver Bradford, Sales Director, London, Corvil
Corvil is the leader in performance monitoring and analytics for electronic financial markets. The world’s financial markets companies turn to Corvil analytics for the unique visibility and intelligence we provide to assure the speed, transparency, and compliance of their businesses globally. Corvil watches over and assures the outcome of electronic transactions with a value in excess of $1 trillion, every day.

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