Trading Platform Oversight & Choosing the Right Monitoring Solution

Running a sell-side trading desk is a challenging business. Activity is highly regulated, customers are demanding, and competitors more than happy to take your place. Sales traders and execution teams are under intense pressure to update clients on the status of large open orders, explain why a trade may have been rejected or remains unexecuted, or why they are experiencing unexpected price slippage when selling into the market. All of this will be happening in real-time.

In addition to efficiently managing client orders, the execution desk will also want to gather as much insight from that flow as possible. This will provide feedback into their business model while also highlighting potentially suspicious activity or erroneous behaviour.

To meet both client service level expectations and internal compliance requirements, an effective real-time monitoring capability is an essential part of any electronic trading ecosystem. But how do firms choose the right solution? Below, we suggest 5 key requirements that should steer such decisions and provide users with the level of oversight and control they need.

1. Transparency

It goes without saying that knowing the status of individual orders and session connectivity in real-time are table stakes. But given message volumes in liquid markets, super-fast search and the ability to drill down by client, parent order, instrument or other definable categories is also critical.

Instant alerting is also needed to quickly identify connectivity issues and performance bottlenecks, while message timestamp traceability coupled with the ability to view forensic field level detail for individual messages will help identify and resolve issues with a particular order.

2. Configurability

Often the volume of messages associated with electronic trading activity makes it challenging to see the wood for the trees. Being able to move quickly between configurable views of consolidated order flow and individual orders will help with this.

However, more advanced configuration can make it immeasurably easier for trading support teams to quickly identify and respond to issues. For instance, tools that enable customised scripting to flag certain message types with pre-defined marks, calculate custom message fields, or define specific alerts and notifications will help improve client service levels and catch potentially unusual behaviour earlier.

If configurable to specific client SLAs, latency benchmarks, or regulatory driven thresholds, the solution can play a key role in limiting reputational damage or even potential fines.

3. Control

The right solution will deliver the transparency and alerts to instantly identify rejected orders, partial fills, or failed trades in an efficient manner. This gives trading desks the level of oversight they need across their entire order flow. However, true control comes from the ability to intervene to adjust or ‘kill’ orders that fall outside defined parameters or are a result of fat finger errors. With such an added layer of defence, sell-side desks can mitigate potential costly scenarios and be confident in the efficacy of their overall trading operations.

4. Insight

While trading activity oversight might be the primary business driver for deploying a monitoring platform, capturing the data flowing across a firm’s trading infrastructure can offer significant secondary benefits. A monitoring capability that can process and store high message volume allows users to query historical data for deep business insight. Whether analysing trading volumes by client, execution venue, or time of day, evaluating trading behaviour or investigating system performance, historical data analysis and visualisation can provide the key to creating a truly data centric trading operation.

5. Flexible Deployment

Considering both current needs and longer-term strategy is important when choosing technology solutions. Ideally, the monitoring solution should be able to integrate order flow across geographies and markets to create a holistic view of the business. It should also be capable of handling all asset-classes so that firms can deploy a single, best-in-class enterprise platform rather than disconnected point solutions. And finally, the technology should accommodate on-prem, in-cloud, or hybrid deployments to facilitate evolving infrastructure strategies.

Ultimately, sell-side firms should aspire to achieve a single source of truth with a solution that provides a consolidated oversight of trading activity across business lines, has the tools to enable a level of control that inspires client confidence, and accessibility to data that can be mined for valuable commercial insight.

 

Rapid Addition

Spanning your electronic trading infrastructure, RA Monitor provides unrivalled insight to give you total transparency and control of your trading operations. Platform agnostic and highly customisable, RA Monitor delivers a real-time, forensic level view of electronic trading activity, status, and performance through a web client UI, empowering teams across your firm to continuously manage execution quality and optimise client support. When deployed alongside RA Hub, Rapid Addition’s high-performance trading platform monitoring technology, RA Monitor delivers even deeper integration and enhanced control of electronic trading order flow.

To find out more, please contact us at enquiries@rapidaddition.com