Increase reliability, meet new regulatory commitments and continuously measure the real-time performance experienced by each participant
Retaining existing members and further building market share in an increasingly fragmented environment, whilst managing evolving regulatory pressures, including the new rules to be introduced in MiFID II, presents trading venues with many challenges.
Ensuring members benefit from consistently fast and efficient market access and order matching is integral to success. As is identifying when this hasn’t happened, how the situation can be quickly resolved and its repercussion avoided, whilst also quantifying the issue’s impact at a business and member level.
Velocimetrics is able to support trading venues seeking to build an internationally competitive offering and deliver a world-class participant experience. With Velocimetrics’ technology, trading venues can not only instantly detect emerging technical issues impacting performance and SLAs, and pinpoint the issue’s exact source to radically reduce time to resolution, but also instantaneously identify exactly which orders have been impacted and the participants to which they belong.
Transforming the relationship between the trading venue and its participants, Velocimetrics’ technology reveals opportunities to optimise performance and enables users to detect issues before members even realise an incident has occurred. These early warnings enable engineers to get one step ahead, so they can minimise impact and more quickly bring developing situations under control.
With Velocimetrics’ technology trading venues are able to overcome many challenges, including the following:
Gaining a real-time, end-to-end view of all trading activities, so emerging performance issues can be instantly detected and more quickly resolved
- Velocimetrics’ technology is able to capture data at multiple points across business processes, using a combination of high speed, passive network data capture and high precision in-application instrumentation techniques. These techniques can be mixed and matched throughout an environment based on client requirements.
- By then intelligently detecting the driver relationships that exist between the data captured at various points, and instantly tying all related information together, such as an order to matched trades and the various market data ticks and status notifications it produces, Velocimetrics’ technology can examine all trades as they move through every stage of the business process in real-time. Furthermore, transactions can be rapidly reconstructed for detailed post-event analysis.
- In gaining an uncompromised, real-time understanding of all activities being completed, and the performance levels achieved at every stage, from the moment of order receipt through to completion, operational oversight across the entire process can be achieved.
- By measuring both round-trip latencies and performance on a hop-by-hop basis, and comparing current statistics to historical averages, latencies or other anomalies occurring at any point in the entire process can be instantly detected.
- Raising alerts the moment an issue starts to develop and pinpointing its exact location, regardless of whether it is inside an application or on the network, engineers are able to instantly commence analysing the problem’s root cause. This approach significantly reduces time to resolution and enables delays to be more swiftly eliminated. In doing so, the impact on existing and future member orders can be minimised.
- On an on-going basis, the performance of different hops can be continuously analysed against established trends, in doing so highlighting opportunities for engineering effort to further reduced latency.
Velocimetrics’ technology can monitor complete order flows end-to-end across a trading venue’s environment
Quickly identifying which participants have been impacted by an issue and how, so their experience can be pro-actively managed
- By capturing data traversing the trading venues’ environment at both a business and technical level, Velocimetrics’ technology can not only detect an issue has occurred but also quickly and accurately determine exactly which orders or trades were being processed by the systems impacted when the issue hit. In doing so, producing analytics instantly establishing which clients submitted the impacted orders.
- Automated or on demand reports can be automatically emailed to client-servicing teams in a matter of seconds, providing all the detail required to commence notifying impacted participants.
- This approach enables the trading venue to rapidly analyse the issue from a participant centric perspective and use this insight to proactively contact impacted participants and reassure them of measures being taken.
With Velocimetrics’ technology, when a technical issue occurs, member support teams can quickly identify exactly which orders and trades have been impacted and how
Understanding execution quality in real-time on a per participant or group basis
- With Velocimetrics’ technology, trading venues can independently monitor every single order from the moment it is placed through to completion. This insight provides a detailed understanding of the latency experienced at every stage throughout the process as well as end-to-end timings.
- Users can be quickly alerted if certain members or participants, or group of members or participants, are not experiencing expected latency levels and access the actionable insights necessary to make effective decisions so they can promptly remedy the situation.
- This degree of transparency also enables trading venues to more quickly address queries raised by individual members regarding the performance of particular orders.
Gain a real-time understanding of trading behaviour on a per participant basis
- By comparing real-time trading behaviour to historical norms on an individual participant basis, trading venues can be alerted to disparities. With this information, account managers can proactively contact members, supporting retention efforts.
Independently verifying if member service level agreements (SLAs) are being satisfied
- Velocimetrics’ technology enables the performance of participant orders to be continuously monitored and analysed against critical SLAs. Alerts can then be raised if the venue is in danger of breaching commitments.
- Performance against SLA commitments can be examined on an individual participant basis or by groups of participants such as co-located or remote members, DMA or direct participants. Assessing for instance:
- The speed of participant connections
- Order matching timeframes
- The timeliness of fill or partial fill acknowledgements
Ensuring orders are being matched in a fair and orderly manner
- As Velocimetrics’ technology can trace every order from its moment of receipt, users can be alerted if orders are being processed by the matching engine in a different sequence to their receipt at the client gateway.
- This approach enables trading venues to ensure members benefit from the efficient and fair execution of orders
Being able to independently validate the performance being achieved by members paying for ultra-low latency services
- Velocimetrics’ technology enables users to slice and dice performance in many different ways to meet a wide range of business needs. This versatile approach enables for instance the performance of individual order types, instruments, gateways or exchange sessions to be examined and compared as required.
- If your trading venue offers a premium service, such as access through an ultra-low latency interface, Velocimetrics’ technology is able to independently verify the performance being achieved by members using this service compared with those paying for a standard service offering.
Be alerted to orders that exceed pre-determined volume and price thresholds or are clearly erroneous
- One of the many ways in which Velocimetrics is able to help trading venues meet the requirements laid out in Article 48 of MiFID II is by offering real-time alerting to a wide range of issues impacting orders submitted to the trading venue, for example:
- Client orders can be monitored by volume and users notified should either volume or price thresholds be breached
- Users can also be alerted should an order fall into a range of erroneous states, known to require manual repair. Following notification the individual orders can then be quickly assessed, repaired or, if necessary, rejected
Receive real-time notifications of significant price movements in a financial instrument
- By comparing current price movements to historical curves, Velocimetrics’ technology enables users to understand if pricing ticks are moving as expected compared to historical norms and be alerted in real-time to sudden price jumps
- With this insight trading venues can then quickly investigate the issue and determine if they should temporarily halt or constrain trading as required by Article 48 of MiFID II
Measure the degree to which system enhancements have improved performance
- With Velocimetrics’ technology users can track system performance using historical statistics, and compare with other checkpoints or current performance. Data from before and after upgrades and enhancements can be compared, providing insight regarding the average performance achieved, outliers, and how the system performs at different times of the day and under different load conditions.
Enabling trading systems to more effectively deal with increased order flows and market stresses
- Velocimetrics’ technology is able to raise alerts if trading volumes have reached configured thresholds, feeding into capacity planning processes. Armed with this insight users can more effectively manage developing situations
- By employing Velocimetrics’ technology in a pre-production environment, performance can be accurately assessed under differing levels of stress. By identifying the capacity limits on certain infrastructure elements, this functionality can help venues more accurately predict how their trading systems are likely to respond under varying market conditions.
- On an on-going basis, Velocimetrics’ technology can be used to monitor capacity trends establishing whether certain gateways, matching engines or networks may be frequently reaching levels where they are at risk of overloading or conversely may be under utilised in different types of situations. With this insight trading venues can then make adjustments to ensure they have sufficient capacity to deal with peak order and message volumes, and can continue orderly trading under market stress conditions.
Read about trading venues that have deployed Velocimetrics
Visit our case studies page to learn about a selection of different firms that have implemented Velocimetrics' technology
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