1 / 13

Liquidity Panel CADC – August 18, 2005

Liquidity Panel CADC – August 18, 2005. “The Relationship Between a Broker/Dealer and Proprietary Trading Groups”. Joseph P. Perry Managing Member RedSky Financial, LLC Speed Trading Partners, LLC. Speed Trading Partners. Proprietary trading group founded in 2000

oliver
Download Presentation

Liquidity Panel CADC – August 18, 2005

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Liquidity Panel CADC – August 18, 2005 “The Relationship Between a Broker/Dealer and Proprietary Trading Groups” Joseph P. Perry Managing Member RedSky Financial, LLC Speed Trading Partners, LLC

  2. Speed Trading Partners • Proprietary trading group founded in 2000 • Initially traded equities and equity options but quickly moved into futures • Employed black box type strategies including arbitrage and hedging • Wrote to a system’s API for programmed order routing and then used that system’s front-end for order management

  3. Challenges for Speed Trading Partners • Minimizing market data and order routing latencies • Minimizing costs • Accessing multiple asset classes • Directly accessing exchange matching engines

  4. RedSky Financial • Created Broker/Dealer and FCM in 2001 • Achieved cost savings • Lowered clearing fees • Lowered execution fees • Joined exchanges thereby gaining direct market access • Improved system’s performance

  5. RedSky Financial • Built own technology • Additional streams of revenue • Flexible clearing solutions • Currently interface with the clearing systems of 6 global clearers and 4 domestic-oriented clearing firms

  6. RedSky Technology • Proprietary trading platform - R3 • Provides direct market access to multiple asset classes • Offers a FIX API and a proprietary API • Supports special order types such as VWAP, reserve (hidden quantity) and pegging • Seamlessly integrates with leading third-party software vendors

  7. RedSky Market Access Access to 24 exchanges/ECNs • Stocks • ARCA • AMEX • INET • NYSE • NYFIX • BRUT • NASDAQ • BTRD • TRAC • Futures • GLOBEX • ECBOT • XEUS • ONE • CFE • EUREX • LIFFE • MX • IPE** • Options • BOX • ISE • CBOE • AMEX • PHLX • PSE • Bonds • espeed • BTEC • FX • espeed • HOTSPOT • EBS**

  8. RedSky Clients • Hedge Funds • Institutions • Proprietary Trading Groups (liquidity providers) • Professional Traders • Family Offices

  9. Role of RedSky • Facilitate clients’ trading • Continuously improve software • Establish additional clearing relationships • Join additional exchanges • Compliance • Risk Management

  10. Challenges for RedSky • Establishing a clear distinction between B/D and proprietary trading group (client) • No selling or internalization of order flow • Orders sent directly to exchanges/ECNs • Technology • Maintaining existing infrastructure • Creating new infrastructure • Pricing (costs) • Negotiating rates

  11. Role of Proprietary Trading Groups • Identifying new trading opportunities • Creating profitable trading strategies and algorithms • Driving direction of technology development for the broker/dealer

  12. Challenges for Proprietary Trading Groups • Risk Management • Costs • Commissions • Technology

  13. Conclusion The successes of both a broker/dealer that provides technology and a proprietary trading group are very much tied to each other.

More Related