There are multiple steps required to implement automated trading strategies. The schematic diagram below illustrates these.
Steps Required For Automated Trading
There are multiple ways to implement these steps. Sometimes, firms have multiple vendor solutions, custom solutions or a mixture of custom and vendor solutions to implement the required steps. The result is often a piece-meal solution which is highly dependent on key individuals, has undue complexity and is difficult to adapt. Technology changes rapidly, personnel turn over and markets changes.
Particular in start-up or early stage firms, open-source software is used in the belief that there is a cost benefit. The cost of such solutions is typically incurred as internal software development and, critically, opportunity cost from not having profitable trading strategies in the market. Thus, the root cause of cost saving, an easily be defeated by the less obvious cost of internal resource allocation and slower time to market.
The most important step for a profitable automated trading operation is Alpha Discovery. All of the steps in the diagram are critical – all software used must be highly reliable, preferably very fast and have the requisite functionality, but Alpha Discovery is where the creativity and skill of a quantitative analyst and trader is expressed. As such, as much time as possible should be spent on this and the following iterative steps of back-testing, analysis & optimization and simulation.
The Deltix Product Suite provides support for all this workflow thereby reducing the time to market of profitable trading strategies.
The Deltix Product Suite of QuantServer and QuantOffice Supports All Steps In Automated Trading
The Deltix Product Suite is well-suited for intra-day trading for equities, futures, options and FX, whether high-frequency trading or simply trading with no or few overnight positions.
Adapters to popular market data vendors are available as well direct market access (DMA) connections where low latency is critical. Similar, Deltix has FIX adapters for many brokers as well as DMA connectivity options.
Deltix QuantServer software is typically installed in proximity or co-located with exchange matching engines. As such, Deltix software is operating in the major financial data centers of New York, Chicago, London, Frankfurt and Singapore.
Click here to see how QuantOffice is used to backtest a simple mean reversion strategy operating on futures contracts.
The Deltix Product Suite is well-suited for daily trading for equities, futures, options and FX.
Adapters for popular market data vendors, such as Bloomberg, IDC, Reuters and others are available. In addition to real-time data adapters, Deltix also has data loaders to pre-populate TimeBase with historical market data and reference data.