Market Data Headaches? You Are Not Alone. Do We Have the Answer?

By: Ray Pellecchia

File Under: NYSE Technologies

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From Combie Cryan, Head of Business Development, Global Data Products, NYSE Technologies:

The arena of market data is increasingly complex:

Market data volumes increased by over 70% in the past year alone. The continued arrival of new venues and increasing rate of fragmentation of liquidity shows no sign of abating. Fidessa’s fragmentation index in Europe show that investors now need to connect to four or more venues to trade, for instance, in UK blue chips (as opposed to just the one that was necessary a little over two years ago).

Incumbent venues’ fast reactions to new arrivals means that exchange-driven changes -- and the demands they place on clients to react -- shorten the useful life of infrastructures designed to capture this data. In addition, the traditional vendors increasingly rely on the data feed segment, versus their more mature terminals business, for growth. New entrants are also circling with perceived unique propositions in network flexibility, latency performance, speed to market or customer service.

All this complexity inevitably means more challenges for users in a world where costs of handling data feeds and data center spend and drivers for renewed investment in hardware, software and network infrastructure have never been higher and have never been faced by such a wide cross section of the investment community. The race to be connected in the lowest latent way to as many venues as possible has gone ”mainstream.”

All of this is happening at a time when budgets have never been tighter.

Clients are looking to address these challenges in three main ways:

1. Many are looking to outsource to a third party who can take away the headache of responding to this fast-changing environment, leaving them free to do what they do best: invest.

2. Counterbalancing this, with the collapse of some outsourced service providers in 2008, many clients are being extra vigilant about who they outsource to, with many deliberately choosing multiple service suppliers to minimize impact should a service supplier not last the distance.

3. Given that the rise in volumes and fragmentation is here to stay, many clients are calling a halt to throwing money at the challenge and asking what venues do I need to be on. how fast do I really need to be, and what is the cost benefit of the money spent on that extra micro second or that extra venue?. In short, they are looking to right size their solutions based on hard evidence of what venues and what performance maximizes their return on capital employed.

4. Related to the above, many are looking for the greatest possible transparency.

To mark the launch of its SuperFeed service in Europe, NYSE Technologies has published a white paper on how its clients can look to address these headaches and how SuperFeed may play a key role in reducing cost and complexity while maintaining performance and flexibility. The paper includes a useful tick list of criteria in making data acquisition decision and case study of a client who has recently slashed its market data spend using SuperFeed.

All of this should be great news in these tighter times.

Sounds too good to be true? See for yourself by requesting your copy of the SuperFeed White paper by emailing: NYSE-Technologies-Sales@nyx.com