Friday, August 26, 2011

bare bones trading system components for a small trading shop

I talked to a micro hedge fund (not a prop trading shop, since they have outside investors) and realized how important each system functionality is to a trader.

* pos mgmt? I thought this would be the core, but i guess in day trading, there's not much position to keep. Probably provided by a professional software package. Such packages exist for small to medium to large firms. Even the largest banks could use Murex and SunGuard (a competitor to Apama)
* market data? essential to a trader, but high volume not always needed
* connectivity to ECN or banks, or other liquidity venues? essential
* pnl - always requires manual verification
* trade blotter? apparently quite basic. probably provided by a professional package.

Again, pricing proves to be heart of the data flow. Most important data items are those related to pricing. Most important everyday decision is pricing decision including (market) risk management.

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New York (Time Square), NY, United States
http://www.linkedin.com/in/tanbin