June 25, 2014

Trading Tech Talk 10: The Anti-Pit Proposal

58 minutes

Hot Topics in Tech: Vesel Interactive - taking a look inside the black box. Industry group believes CME Group should suspend open-outcry trading if Globex crashes and reopen for after-hours session. Can we trust the SECs MIDAS touch? SEC supports plan to move more stock trading onto exchanges, away from private trading venues operated by banks and other firms.

The Lightning Round: Minis: the beginning of the end? Dark pools: the same? Flash Boys: Food for thought or hyperbolic source of disinformation?

The Inbox: Listener questions, comments, and feedback

Question from Innovert - Lots of talk about the Options House/Trade Monster merger today. Many reasons being tossed around. Do you think Tech was a big driver? In particular the cost of developing and maintaining a cutting-edge options platform? Is the simply beyond the reach of smaller firms these days? Have we as options traders come to expect too many bells and whistles?

Question from Derrin Jacoby - I have heard some talk about HTML5 on recent episodes. Can the hosts explain a little more about the benefits of this technology vs. earlier iterations of html? We did not see much in the way of Fin Tech web functionality with old versions of HTML. Everything sophisticated seemed locked to the proprietary client spectrum. Do you feel HTML5 has enough muscle to finally change that? Are we entering the brave new world of thin client functionality in the Fin Tech marketplace?

Question from Big Data - Flash Boys focuses a lot of detriments of colocation at exchanges. The book interprets that this offers unfair advantage to firms willing to pay for access. Whether you agree with this conclusion or not, do you feel we are entering a period of increased regulation and potential backlash against colocation? I would imagine this is a substantial revenue source that the exchanges will not part with without a fight. And what about the large data center like Equinix? They seem to be ground zero for this debate? Do you think we will see increasing regulatory crackdown on this private data center side of the business?

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