Trading Tech Talk

CTO Interview: Today's guest is Joseph Wesley, Founder & CEO of Vesel Interactive.

He discusses:

• An overview of his background in the derivatives market?
• What is Vesel?
• Who is Vesel's end user?
• How many firms are using the Vesel system right now?
• How does Vesel generate your derivatives volume reports?
• Why do firms share their data with Vesel?
• What safeguards are there against firms under/over-reporting their volume or marketshare?
• An overview of VolAxe?
• How easy is it for clients to build their own hook into the system using the API?
• How does this offering compare with what the guys at EQ derivatives are offering?
• Teases of upcoming Vesel developments

Listener Mail: Listener questions and comments

• Question from Avalone - What is the take on coinbase. Seems to be making a lot of headlines. Exchange went live this morning. Any takers out there for these bitcoin things?
• Question from VTech - Are there specific GUI challenges for options front ends vs. equities? I know that options have more series than equites. Does that translate into any unique needs for those products vs. standard cash equities? I am studying UX at school with the hopes of breaking into the financial realm after graduation, perhaps on the derivatives software side.
• Question from Mark Brant - @Options Please explain how options block trades are executed and how to transition to block trading from retail work. Thanks!

Hot Topics in Tech: SEC plans to fix data release flaw in Q1 2015. SEC pokes hole in argument it is too slow to get grip on markets. Nobel laureate Stiglitz blocked from SEC panel after faulting high-speed traders. Finally progress on obvious error rules: BATS obvious error filing. Big fund managers form new dark pool equity trading venue. Cyber Security: JP Morgan and Target attack. CME Group fines three firms for automated trading violations. Dark Pools Detente: ICE has unlikely ally on trading proposal.

The Inbox: Listener Questions and Comments

• Question from Andy Charles - You guys were pretty dismissive of Robin Hood on the last show. Do you feel that is because you are not really the target market - you are not 23 with $200 to your name? Are you giving it a fair shake?
• Question from Tim C - NYSE invests $75M in Coinbase. Nadex lists Bitcoin binaries. Tera Exchange lists Bitcoin derivatives. Is it time to accept that Bitcoin is here to stay?

Trading Tech Talk 21: The Best and Worst of 2014

The Best/Worst of 2014:

• Best - Increased willingness to discuss cyber security in the financial markets.
• Worst - Post-Flash Boys backlash.
• Worst - Growing stranglehold of regulation, regardless of cost, impact or unintended consequences.
• Worst - Continued reduction in tech budgets in 2014.
• Worst (Best?) - FINRA tightening the leash on algo regulation.
• Best - Detente on patent disputes in the financial markets.
• Worst (Best?) - Death of Darkpools?
• Worst - Continued explosion of options exchanges.
• Worst - Technology outpacing regulators.
• What can we look forward to in 2015?

Trading Tech Talk 20: Real-Time Risk and Margin in the Cloud

CTO Interview: Today's guest is Robert Newhouse, CEO, Victor Technologies. He gives an overview of his background in the derivatives markets, and what he does at Victor Technologies. Enhanced analytics, Difference vs. Hanwick, GPU acceleration, and DJALI application.

Hot Topics in Tech: Cyber risk is a top concern, 84% tell DTCC. Financial technology sector complains of lack of bank services.

The Inbox: Listener questions and comments

• Question from Analagus: bit of a thought question for the TTT hosts. Who has an easier road to profit - an algo inclined trader who does not know how to program vs. a programmer who wants to trade?
• Question from George B., Los Angeles: My question is for Trading Tech Talk. I skipped FIA Chicago this year because I could not fit it into my schedule. But it's always a good show to get a read on the trends in tech for the coming year. The exhibit hall is one of the biggest I have ever seen. I know Mark probably attended since he's local, and perhaps the other hosts as well. Just curious if you could give a rundown for those of us who missed it as to the major tech themes coming out of the event.
• Question from Objectivist C: For all tech-related spends at firms has always been build v. buy. Seems like the answer typically fell on the build side if you wanted a competitive edge and to utilize proprietary systems or strategies. But with budgets being stretched much farther these days and upgrade cycles being extended do you foresee this trend shifting toward buy in the future? Particularly as popular trends like cloud adoption democratize access to powerful systems?

Trading Tech Talk 19: Can Crazy Math Save the Exchanges?

Hot Topics in Tech: Fresh SEC crackdown on "flash crashes." Final approval of Reg SCI. "CFTC is so underfunded that it cannot evolve to handle Bitcoin and modern electronic markets," says Chairman Massad. Formal verification for trading algorithms to improve exchange reliability?Are we in a fintech bubble?

The Inbox: Listener questions and comments

• Question from Neal Dorman - Saw a stat yesterday that an alarming number of millenials do not see the need for a bank. What does that mean for Fintech startups as well as support for this sector going forward? Is this the new buggy whip?
• Question from Avo - Can you discuss the complex order books at the options exchanges and how they function?In particular how they do not talk to each other or route orders away to other books? Are there any changes or developments in the works to fix this? Thanks for the show.
• Question from Dataman - Hola Tech team! I work ing cloud infrastructure for a big hosting company many of your listener are probably familiar with. I enjoy the show but I have to wonder if there just too many obstacles for mainstream tech like the buzz-heavy cloud to ever be fully embraced by financial services companies. Finance firms are not retail merchants or widget makers. They have severe restriction on their technology and their compliance. May I am a cynic, but I do not know if I ever see those obstacles being overcome. At least not translating into a "cloud" that is similar to what is available in other industries.

Trading Tech Talk 18: Spoofing Dark Pools

Hot Topics in Tech: Barclay's dark pool trading rises 23% as bank recovers from lawsuit. Dark pools pitched as havens are anything but, T. Rowe says. NYSE pulls reg back from FINRA, leans on tech. Spoofing - everything old is new again - High-speed trader accused of commodity market "spoofing". High-frequency firm said to be finalist to run Nasdaq Price Feed. Expand automated trading safeguards to include brokerages, SEC members say. CME cuts tech jobs. Sungard cautions on "fintech" valuations

The Inbox: Listener questions and comments

Question from Sal Warren: Love the tech program. Great addition to the network. I'd like to know what impact the growing incubator and startup scenes in NYC and Chicago will have on fintech going forward. Do you expect to see the next big innovations on the scene coming from entrepreneurs rather than established players like exchanges or vendors? Last up - does trade alert offer API access if i want to include their data in my models?

Trading Tech Talk 17: What Exactly is Best Ex?

Hot Topics in Tech: OCC and the U.S. Options Exchanges announce new risk control standards to strengthen industry projections. FINRA approved a series of new rule changes focused on high-frequency trading and algorithmic trading. BABA IPO goes fairly smoothly. Chicago Stock Exchange turns to tech to save itself. Robin Hood app. Yet another attempt at zero commission stock trading. Just what the hell is "Best Ex"? Tabb Group jumps into best ex fray with clarity.

The Inbox: Listener questions and comments.

• Question from Astro429: what do you think is the biggest obstacle to microwave adoption in the U.S. financial community?
• Question from Silas J.- this question is for the trading tech talk radio program. Hi Mark, Henry et al - great show. I'm hearing a lot of talk about enhanced data feeds coming from vendors and exchanges. You touched on this way back in episode 3. I would like to know if the landscape has changed and if you’re seeing more players enter this space? Is this the future? Am I going to be able to run sophisticated algos on my phone soon because all the computational work is being done in the cloud and pushed to me? Personally I think that would be pretty cool. Also can you guys do a show on getting started as a quant or developer in the fintech space? Thanks.

Trading Tech Talk 16: Upgrade Dilemmas and Open Source Surprises

Hot Topics in Tech: ICE conquest continues with SuperDerivatives acquisition. Wall Street firms push back against Bloomberg's dominance in instant messaging. Dark pool volume not impacted by bad press, regulatory fines & pending litigation. ParFX trials high-speed market makers on their trading platform. Doubts raised over global forex platform. Korea reveals derivatives safety measures. No rush to upgrade OMSs among sell-side firms. TABB Group jumps into best ex fray with clarity.

The Inbox: Listener questions and comments

• Question from Jerry - I was surprised to learn recently that Goldman Sachs is using open source software for many of their trading systems? Do you guys find that as surprising as I do particularly in the wake of Flash Boys?
• Question from Simtech - Most tech startups talk about getting to a minimum viable product. Can startups and firms in the financial technology space even do that, given all of the regulatory and compliance hurdles in place? They essentially have to launch with a finished products that is ready to go. Does that place an unfair burden on startups in the financial space?

Trading Tech Talk 15: Virtual Machines Vs. Bare Metal

Hot Topics in Tech: MMI gets Chilton as an adviser to an industry group for high-speed traders less than six months after stepping down as a US regulator. Glitch Season Returns - Nasdaq breakdown causes "stuck" orders. CME futures trade resumes after technical glitch - trade begins about four hours late. Big Data - Improving research an going visual.

Data visualization demand spikes. TD Ameritrade dispute turns spotlight on US patent legislation. Citi pays $5m to settle SEC data charges. Greifeld warns on "perverted" dark pools - Legitmare point or exchange executive slamming the competition

The Inbox: Listener questions and comments

• Question from Joe Mein: I'm writing with a question for options tech talk. Can the hosts relate their experiences with AWS - particularly EC2 - when it comes to using their virtual CPUS to backtest models for options trading. Is this an efficient way to extend our capability without making a large hardware investment or is there too much latency to be of much use. I've heard mixed things about Amazon's virtual CPUS from some peers and hope this program can help settle the debate. Also if not AWS, are there alternatives you can recommend?
• Question from Bosun: This one is for the tech heads on TTT. Great program. I'm an active retail trader and fan of the Option Block and Volatility Views. But Trading Tech Talk is growing on my radar as I'm starting to learn more about what's going on under the hood in the markets. That stuff is pretty scary but mark and the panel do a good job of setting us straight. It also makes me wonder what I can do to profit with this tech. I keep coming across services that claim to provide actionable trading data from social media. I know this is the hot trend right now so we're bound to see more of these in the coming months. I'd like to know if you guys buy into this trend or think it's just a fad. Any service recs would also be a plus.

Trading Tech Talk 14: End of the Race to Zero

CTO Interview Segment: Today';s guest is Dan Sacks, CEO of Actant.

He discusses:

• An overview of his background in the derivatives space.
• A background of Actant.
• Actant's key products and consumers
• Free troubleshooting for your clients
• How important is speed?
• What is the use case for Actant's Extstream product?
• What does Extstream offer that the legion of other risk/analytics platforms do not?
• How he feels about changing fee schedules?
• What was the genesis behind the recent deal with Liquidpoint?
• What he thinks of the recent controversy over the Globex outage?
• Have we reached the point where adding new venues is simply risk prohibitive at this point?

Hot Topics in Tech: ICE buys patents from Trade Technologies. What is sufficiently accurate to collect timestamps on multi-party electronic trading data? Is it seconds, milliseconds, microseconds, or nanoseconds? 'Flash Boys' and the Speed of Lies - By Brad Katsuyama

The Inbox: Listener questions and comments

• Comment from Kaiserdog76: Mark- Kudos again for covering Barclay's and the HFT shakedown that has been going on. It is the biggest thing no one seems to be talking about. Please keep it coming!
• Question from Anon. (withhold name): Loving the trading tech talk program. The episodes with Hull and Liquidpoint were great. I look forward to each new episode. I work for a vendor (which shall go unnamed) and i see a lot of these debates playing out every day. Quite frankly a lot of the firms that I deal with are fed up with shelling out every six months for new tech. They are overburdened by regulatory expenses that are siphoning off any remaining discretionary budgets and they are being forced to make do with the tech they already have. My question for the panel - do you think this will be the ultimate deciding factor in the financial technology space? Firms essentially saying "no mas" to increasing tech arms races, abandoning the already dated "race to zero" and instead focusing on new strats and products that take full advantage of their existing tech without a large additional capital outlay? Between you and me I'm already polishing my resume. So I guess that goes to show where I think things are heading. Love the show. I'll keep listening no matter how this thing shakes out. If you use this on the show please don't read my name.