Few things are transforming software, business, and nearly every aspect of our lives like cloud computing and software-as-a-service (SaaS). It’s easier than ever to build and deploy new applications, and the result is a plethora of new companies vying for our attention across nearly every domain. The cloud revolutionizes data collection and analysis and empowers SaaS, making it simple to distribute software to anyone, at any time, in nearly any location.
It’s no surprise, then, that the cloud is finding its way into trading systems as well. TT was an early adopter of cloud technologies in the trading space. We began talking about our next-generation trading platform in early 2014, but a year and a half later, and particularly with new entrants using similar terms, I think it’s important to ask: what does it mean to be a “cloud trading platform,” is there a difference between SaaS and “cloud,” and where does TT fit into the mix?
Whereas historically, trading systems were built and deployed in roughly the same manner, today there are a variety of approaches for building these systems. These varied approaches may not look very different in marketing materials since they all boast performance, ease of use and access to APIs, but understanding the differences is critical when making a decision about how to best allocate investment in trading infrastructure.
- First, there is the classic deployed trading system, which is still the norm in the industry. You allocate hardware in a data center. You deploy software to it. Every client application needs some kind of dedicated connectivity. Market data is handled in its raw form, and order routing is done as close to the matching engine as possible. These systems are costly to maintain but generally give you the ability to optimize every part of the system for performance.
- On the opposite end of the spectrum is the new “cloud trading platform.” These systems leverage web services accessible over the internet typically via a thin client (often web browsers). They may or may not be deployed literally on a cloud provider’s infrastructure since sometimes “cloud” just means “available via the public internet.” They simplify accessibility and will often boast that they are high-performance, but in reality, they don’t source raw market data and order-routing feeds and are therefore significantly slower than their classic, large-infrastructure predecessors.
At TT, we find both alternatives to be lacking. The cost to maintain your own infrastructure with a classic deployed trading system is too great, and as a technology vendor, having many discrete on-premises deployments makes it a challenge ensuring all of our end users have access to the latest markets and features we support in a timely fashion. Conversely, the compromise in performance, security, reliability and flexibility in “cloud trading platforms” is equally unacceptable. While the internet will continue to fundamentally improve the accessibility of our markets, it shouldn’t be the only connectivity option. So, we’ve decided to find a way to get the best of both worlds–to make no compromises.
We know that SaaS is the only way to truly scale a software business. At the same time, we know that many trading strategies are latency-sensitive and require that the user have control and customization that is not traditionally part of a SaaS offering. We know that the cloud also is not a fad, and yet these same latency sensitivities that pose a challenge to a SaaS platform make the cloud a less viable tool for system development and deployment.
TT is a hybrid solution that doesn’t make you compromise performance for accessibility, cost for customizability, control for scalability.
First and foremost, TT is a professional trading platform that delivers best-in-class performance. Our vanilla, out-of-the-box offering with no infrastructure charge gives you double-digit microsecond turnaround on complex trading strategies with integrated pre-trade risk controls that allow both a broker and a trader to get what they need. The back end is C and C++ on Linux and is colocated with exchange matching engines and market data feeds. We don’t rely on someone else to aggregate market data, nor do we have to route orders through someone else’s FIX infrastructure.
Never before has a trading system with the back-end power of TT been this easy to access.
Specifically, the cloud is used in TT for a handful of functions, none of which are involved in latency-sensitive activity.
We leverage Cassandra and Scala in AWS for the “forever audit trail” and a global order book where every execution-related message for every user for all time is encrypted, stored and retrieved. This implementation leverages the best of what the cloud offers in terms of scalability and cost. We also use the cloud to store UI preferences and settings, the security master database and historical market data going back more than 10 years as well as to host the front-end HTML5 application.
None of these applications benefit from low-latency technologies, hardware acceleration or colocation. This hybrid cloud-colo implementation allows us to better scale and reduce the costs our users incur to use TT.
- Dedicated/private network connectivity, removing the internet from the equation
- Dedicated servers, allowing brokers to eliminate the risks of multi-tenant/cross-contamination
- Custom deployment of colocated services, allowing for “nirvana” configurations and providing best-in-class algo/Autospreader® performance
We believe that cloud-based solutions are asking you to compromise performance for cost and accessibility. Deployed platforms force you to do the opposite.
TT asks you to stop compromising and start leveraging a platform designed to give you the maximum in performance, accessibility and cost.