All posts by Mike Agnew

Senior Product Manager


TT received multiple awards last week in New York, including
the HFM award for “Best Trading and Execution Technology.”

Well no, TT did not win anything at the Grammys. We did, however, take home both “Best Trading and Execution Technology” at the HFM U.S. Technology Awards and “Best Overall Technology” at the CTA U.S. Services Awards.

The CTA Intelligence Services Awards honor firms that have provided outstanding support and services to the North American managed futures industry, while the HFM U.S. Technology Awards recognize hedge fund technology providers that have demonstrated exceptional customer service and innovative product development.

“Given the strength of the contestants, it is quite an accomplishment for Trading Technologies to earn honors in both the HFM and CTA awards. With unique features like MultiBroker, order passing and ADL, TT’s X_TRADER platform gives traders a combination of flexibility and power that makes it a top technology offering for both CTAs and hedge fund managers,” said Matt Smith, head of content for CTA Intelligence. This sentiment was echoed by Chris Matthews, HFMWeek technology correspondent.

It’s great to know that hedge funds and CTAs find our X_TRADER® trading solution to be so compelling, but what’s coming with our next-generation TT platform is even more exciting.
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Jim Kharouf commented recently in the John Lothian Newsletter that the potential impact of TT’s MultiBroker solution was not due to anything remarkable about TT’s technology, but rather the unique position that TT occupies in the futures industry. As product manager for MultiBroker, I spend a lot of time talking to customers about its features and benefits, things like innovative trading tools and APIs, our award-winning ADL™ visual programming platform, world-class performance, FIX integration, etc. But these features are also well established in our current single-broker offering (a.k.a. the “7x platform”). I, too, find it hard to single out any new breakthrough technology that is the enabler for MultiBroker.

In bringing MultiBroker to market, we did make a number of key changes within the foundation of our 7x platform, but by and large it is still basically 7x architecture. I confess that I find the re-use of familiar software slightly unsettling at times. Since TT is a software company, we should be producing software, and the more software we write, the better the end result, right? Not necessarily. TT’s first attempts at multi-broker functionality required a lot of new code including additional special-purpose servers, complex configurations and/or significant additional investment in server hardware. The proliferation of new moving parts caused each of these previous attempts to collapse under its own weight.

In contrast, the value of our current approach to MultiBroker is that it is an overall simplification of the TT system. By subtracting duplicative infrastructure, configuration and yes, even screens, from the trading experience, life gets a lot simpler for the traders, administrators and operational staff. In this case, the new whole is greater than the sum of the (far, far fewer) parts. Addition by subtraction works.

Such changes to the foundation of a global software platform do take considerable time, and during that time, the natural inclination of engineers is to cook up even more interesting new “features” to make end users “happy.” James Surowiecki, author of The Wisdom of Crowds, called it “the spiral of complexity.”

“You might think, then, that companies could avoid feature creep by just paying attention to what customers really want. But that’s where the trouble begins, because although consumers find overloaded gadgets unmanageable, they also find them attractive.”

The story of MultiBroker during its development has been one of a constant battle against feature creep. I think the lack of obvious new whiz-bang technology speaks somewhat to our success at keeping the feature-creep beast at bay. That still doesn’t answer the basic question: “If not the technology, then what is all the fuss about?” Can a new product offering like MultiBroker be both evolutionary and revolutionary at the same time?

The breakthrough is the network

Our situation reminds me of Sun Microsystems’ slogan: “The network is the computer.” But in TT’s case, one might say: “The breakthrough is the network.” The strength of TT’s network, in terms of technology, physical distribution and especially business relationships, is what is making people sit up and take notice. TT is on the verge of taking the TT trading experience from end to end into a new environment that maximizes relationships for both buy-side and FCM participants. The combination of a broker-neutral solution, 100 percent direct-to-market order routing and a majority of the industry-leading brokers as day-one participants is a powerful one and, I believe, one that is unique to TT. Bringing a critical mass of end users into a growing and diverse pool increases choices and options for all, with benefits accruing to both sides of the fence.

One last point about technology: Just because we haven’t changed the game for now, that doesn’t mean we’re not actively cooking up the next steps. Real creativity starts with a sense of play, and that sense of play is alive and well at TT. It may be counterintuitive that the fastest route to solving hard problems often starts unintentionally with someone “just playing around.” It turns out that there are different ways to approach play that actually increase the likelihood of a creative result. John Cleese talks about the interaction between play and creativity in his lectures on the topic:

“This is the extraordinary thing about creativity: If you just keep your mind resting against the subject in a friendly but persistent way, sooner or later you will get a reward from your unconscious.”

So in spite of its familiarity, MultiBroker is breaking new ground for TT in many ways. We believe that the launch of MultiBroker puts TT on the threshold of even bigger things to come. And as for changing the game, we’re looking forward to a lot of work play ahead of us to make that happen.

This post about TT’s new MultiBroker ASP solution by Jim Kharouf was originally published in today’s John Lothian Newsletter. Jim is editor-in-chief of JLN.


Sometimes it is the small innovation or service that changes an industry.

Jim Kharouf, editor-in-chief
John Lothian Newsletter

Trading Technologies (TT) announced last week the launch of a new trading function that allows TT customers to choose which brokers they will route their orders through on its X_TRADER® platform. In other words, if you want to trade 100 crude oil futures, you can route 10 contracts through one broker, 50 to another and 30 to another and 10 to another, all from one trading screen.

This could be a game changer for the futures industry.

This technology is not groundbreaking, as other technology vendors already offer it, from Bloomberg to Realtick to Thethys and Trading Screen. But none of those firms have the futures footprint of TT. And in that sense, the new multi-broker solution could usher in a new era of competition among FCMs and choice for end-users. TT’s multi-broker functionality is in the beta testing stage, and also includes 11 banks, who have agreed to adopt the service including: BofA Merrill Lynch, Credit Suisse, Deutsche Bank, HSBC, J.P. Morgan, Jefferies, Macquarie Bank Limited, Mizuho Securities USA, Morgan Stanley, RBC Capital Markets and UBS.

Why would a broker ever want to be put on a system that could ultimately route order flow away from it? Because that broker believes it is better than the competition. So far, 11 FCMs think they have what it takes to not only keep existing customers but add new accounts as well.

When thinking about the impact of this concept, one example comes to mind. The airline and travel industry, has been massively challenged and changed with the introduction and spread of online travel booking sites such as Orbitz, Priceline, Travelocity and others. Customers have always had a choice of airline, but now individuals have more transparency on pricing and ability to pick the right trip for them. And customers have responded. Orbitz, launched in June 2001, was initially supported by five major airlines and drew 2 million visitors in its first month. Last year, the company said it handled more than 18 million per month.

TT’s solution just offers potential competition and convenience to its customers in a similar way. TT plans to expand that FCM list as the beta testing leads to a full launch planned for this summer.

The question is whether TT’s service will attract more FCMs, particularly Goldman Sachs and Newedge. The other issue is whether TT might take this service to another level – offering brokers a chance to display commissions, discounts or other services that might garner new customers to their platform.

It is a fine line to walk for TT, but the fact that it has created this service and found buy-in from both customers and the solid group of FCMs already is a sign a change in the industry may be brewing.

– Jim Kharouf, Editor-In-Chief, John Lothian Newsletter

Image via M-Pics/FreeDigitalPhotos.net


Just a Little History


“Who am I? Why am I here?”


– Vice Admiral James Stockdale

A “multibroker solution” can be broadly defined as a trading platform that provides the buy side with the ability to execute and clear with multiple brokers, preferably from a single screen.Over the years, there have been many reasons for TT to offer a multibroker solution. The beginning of the 21st century was a boom time for commodities and futures markets. During that period, the biggest challenge for a trader seemed to be how to capture a piece of the ever-growing pie, in an environment where trade volumes would go up for the foreseeable future. Even the occasional bump in the road didn’t seem to slow anyone down for long. The more relationships you had, the wider you could reach to gather in the bounty.

But it was by no means an easy road. The barriers to multiple broker relationships were many:

  • Some brokers could be accessed only via their proprietary single-broker offerings.
  • Multi-asset, multibroker platforms lacked advanced futures trading functionality.
  • Software vendors (like TT) had solutions that were “broker-neutral”, but still required separate infrastructure for each broker.
  • Each broker presented unique back- and middle-office integration overhead, especially with regard to Financial Information eXchange (FIX) protocol integration.

In spite of the costs and complexity, those firms with enough resources to apply to the problem simply forged ahead with handcrafted multiple-broker integration, sometimes supporting separate software solutions for as many as half a dozen different futures commission merchants (FCMs). When it came to the multiple broker club, many small or even mid-tier buy-side firms were left on the outside looking in.

Over the years, TT has done a fair amount of talking about a multibroker solution. We made a couple abortive attempts at trying to bolt-on multibroker functionality to our existing system. But for the most part, TT focused its R&D resources on expanding trader functionality and market access. Our 7x platform was solid and time-tested. In most cases, FCMs managed their TT infrastructures with only occasional guidance from TT. Yes, TT dipped its proverbial toe in the hosted-solution water with TTNET™. But TTNET only aspired to provide the same type of TT infrastructure management that most FCMs were already doing–basically a competent but cookie-cutter approach, with a few efficiencies gained due to shared infrastructure, best practices and proximity to TT support. Not much progress was being made on the multibroker front at TT.

Then in 2008, the unforeseeable happened.

Consolidation, Consolidation, Consolidation

“There are only three things that matter when it comes to property: location, location, location.”
      – Unknown

The events of the 2008 crash are well known; we won’t review them here. From our perspective, the crash brought a number of critical issues to the forefront:

  • Broker risk: Anyone with just a single broker relationship now wanted two; those with two now wanted three, etc. On the other hand, those with six might cut back to five, or even four. It’s no longer just about maximizing profits, but insuring survival.
  • Regulatory risk: As an industry, we’re still coming to grips with the impact of Dodd-Frank and ESMA regulatory changes. The demands that these changes are placing on FCMs and the buy side are a driving factor in system consolidation.
  • Opportunity risk: Near-zero interest rates and reduced trade volumes mean FCMs are keeping a much tighter rein on which buy side firms are worth the cost and effort to support on a trading system.

At TT, we continued to talk with our end users about these issues. Internally, we had many debates and brainstorming sessions about how to attack various pieces of the new puzzle. About two years ago, the case for a multibroker application service provider (ASP) solution at TT became so compelling–seeming to solve so many of the disparate problems with which our end users were being faced–that we stopped trying, and started doing (apologies to Yoda): we decided to transform our current single-bank platform into a multibroker architecture, starting from the bottom up. So let’s talk about what TT’s multibroker solution is.

What is the New TT MultiBroker Solution?

“It’s a little room in the front of the plane…but that’s not important right now.”
– Leslie Nielsen


Aptly enough, we’ve named our solution MultiBroker. We started by taking a new approach in TTNET, introducing an ASP model for MultiBroker that allows TT to fully manage and scale the trading infrastructure as trade volumes dictate. We are starting to take advantage of cloud resources to help scale the less latency-sensitive components of the system. We believe that an ASP approach will help us take any barriers to entry for our MultiBroker end users down to the bare minimum.Under the software covers, we made precise changes from end to end in every TT component to accommodate the order-routing demands of MultiBroker, while at the same time matching or exceeding the performance and feature set of our existing platform. Buy-side firms will be able to integrate with a single FIX interface across all brokers for back-office and compliance reporting. We kept the visible changes in X_TRADER® and the APIs to a minimum to keep the learning curve low for our current traders and to retain the clean and fast trading style for which TT is so well known.

We are pretty proud of the end result. The MultiBroker solution has been routing live trades in our alpha environment since late summer. Early reviews from both the buy side and the sell side have been enthusiastic, and I am equally enthusiastic. As we move on to beta and ultimately to production in the coming months, you can track progress on our MuiltiBroker initiatives webpage, or in my future blog posts.