Traders need to treat their data as an asset, and integrate it effectively into their workflows, so it can deliver better trading outcomes.
Trading ecosystem provider, LedgerEdge, and Charles River Development (CRD), the order management system experts, have collaborated to bring the unique execution protocols that LedgerEdge offers alongside client data protection, with the broad range of services and tools available on CRD.
David Nicol of LedgerEdge and and Vidya Guruju of CRD tell us how trader can expect to benefit from this partnership, and how they expect it to develop in the future for their clients.
Dan Barnes: Welcome to Trader TV – your insight into trading for professional investors. I’m Dan Barnes. Traders need to ensure they can bring the right information onto their desktop while preventing information from leaking out into the market when they trade. With me today are Vidya Guruju of Charles River Development, and David Nicol of LegderEdge to discuss how a partnership between their funds is going to help traders.
Vidya Guruju: Great to be here.
David Nicol: Hi, Dan.
Dan Barnes: How would you characterize the data challenge that traders are facing today?
David Nicol: Traders today engage with different types of liquidity, different types of data and data of varying qualities. They have to make use and make sense of the data they’re seeing from the market. But more importantly, firms across the buy-side and the sell-side are being asked to treat their data as an asset because their data truly is an asset. It’s powering and informing new and systematic trading strategies. It’s informing firms as they look at their portfolio moves, and it’s something that everyone is making far better use of.
So firms need to not only understand the data that they’re seeing from the market, but understand its quality, and understand what to expect as they engage with that data. But they also need to think about how they own and control their data, how they make good use of their data, and how they use all of that to obtain fundamentally better execution.
Dan Barnes: So how is the partnership between your firms helping them to address this?
Vidya Guruju: As a vendor in the OEMS space, our focus is to provide a broad array of choices to our buy-side traders, whether it be sources of market data, different IOIs, axes, prices being published by dealers, whether it be to aggregators or to venues. To bring that into CRD, to represent that in an aggregated fashion to the traders, and on the back of it also provide connectivity for executing at the levels presented. LedgerEdge helps us deliver on that promise.
When we spoke to our clients and understanding their perspective on what’s happening in the market and what their priorities are in terms of connecting to some of the newer venues, LedgerEdge ranked pretty high, and it has to do with their secure way of protecting the clients data as well as the slick user interface that helps them pinpoint the different options they have and quickly close in on the best execution that they can deliver to their clients.
David Nicol: LegerEdge is a next generation trading ecosystem for corporate bonds. We use secure, trusted and cutting edge technology to give users ownership and control of their data, the ability to use smart orders to engage with the market and not leak their data to the entire market, and connections to fundamentally obtain better execution.
We’ve got this very powerful technology, but the challenge for us at LedgerEdge is we want to make that as usable as possible, as easy to work with as possible. By integrating with CRD, we’re able to integrate directly into the workflows and the technology base that firms already use, to give the trader those powerful tools directly on the desktop where they spend most of their day.
By giving the trader and the portfolio manager liquidity information and information of new and different types of liquidity that are available in LedgerEdge and nowhere, we’re able to help the portfolio manager and the trader put together the very best trading strategy for a few dozen different types of trading situations. So it’s a really tight and natural partnership. And I think that the future of OEMS and venue connectivity involves this partnership and involves adding liquidity information and real, live market data and market pricing to the conversation that’s already happening between various parts of the buy side trading desk.
Dan Barnes: Why have Charles River and LedgerEdge decided to do this now?
David Nicol: We’re on the cusp of a revolution in the corporate bond market. We’re using technology, and we’re deploying technology in a live, regulated environment, built for institutional grade transactions, using new technology that hasn’t before been deployed in this market. Traders and market participants can engage across different liquidity and trading electronically.
We’re at the point in the technology lifecycle for distributed ledger technology and cloud-delivered, trading ecosystems where we can deploy this technology, make it available to customers with these powerful integrations, with firms like CRD, in a way that passes their compliance, integrates into their existing workflows, and delivers that fundamentally far more powerful view into the market to engage and trade better.
Dan Barnes: Looking to the future, then, how is this partnership going to develop and expand?
Vidya Guruju: As you know, desks have been shrinking, which means that the buy-side traders are being asked to do more with less. Something that can be offloaded to automation is highly desirable. So the next set of integrations will be focused on that in terms of being able to bring in some of those indicators, whether it be IOIs or prices, axes, liquidity scores, these kinds of things, back from LedgerEdge into Charles River so that we could use those indicators to automate those orders that we can, the low touch orders, so the traders can truly focus on orders that required manual intervention.
And the second phase of where we want to take this is a more optimized workflow. We have good integration with LedgerEdge today. We call it the staging workflow, which is a user in Charles River is able to send out an order to LedgerEdge, work that order in LedgerEdge and the execution details. Once that is done, flow back into Charles River, fix electronically and update the status and all that good stuff.
Where we want to go, we have two options here. One is a tighter integration through fix where you’re interacting, just in Charles River, and the fixed interactions communicating with LedgerEdge.
And the other option, in parallel, we’re exploring is interaction over a type of framework that enables us to frame LedgerEdges, much desired user interface into Charles River, so that you’re still in the framework of Charles River, but also taking advantage of LedgerEdges user interface. So that’s I think where this is going next.
David Nicol: I think the key is that partnership between the trader and the portfolio manager as they look at real, live liquidity information in the market. Traders and portfolio managers are making far more use of new and different protocols that are really delivering better results in the corporate bond market. These are things like parametric trading, ETF trades and related movements and portfolio trading, as well.
As firms across the buy-side look to take advantage of relative value opportunities and obtain fundamentally better alpha, they’re looking for better partnerships and a more direct route to obtain the liquidity and the quality execution that they need to achieve their strategies.
The partnership between LedgerEdge and CRD is just the beginning. We’re going to be adding new and different protocol integrations, tighter integrations across the pre-trade and the post-trade. And we’re really excited to help users take advantage of the data that they’re bringing to the market, which they only control in LedgerEdge, but in very few other secondary market venues.
Firms like CRD are doing a wonderful job in providing insights and analytics to customers as they go about that trading process. And we’re very happy to help them by providing better interaction with the secondary market itself.
Dan Barnes: Guys, that’s just been great. Thank you both so much.
Vidya Guruju: Thank you for having me.
David Nicol: Thanks, Dan.
Dan Barnes: I’d like to thank David and Vidya for their insights today, and of course to you for watching. To catch up on our other shows or to subscribe to our newsletter, go to TRADERTV.NET.
