Quod Financial
Encyclopedia
Quod Financial is a privately owned adaptive trading technology provider which specialises in software and services such as algorithmic trading
, smart order routing
and internalisation of liquidity
. The firm provides electronic trading
solutions to liquidity venues, exchanges, retail brokers, buy side
and sell side
institutions.
The company is headquartered in London
with offices in Paris
and New York
. It has teamed up with Catena Technologies in Singapore
, to take advantage of liquidity fragmentation in the Asia
Pacific.
and sell side
firms, modules for cross-asset and multi-asset trading, as well as online trading for retail and institutional brokers.
and derivative
asset classes. The nature of the ASOR is dynamic and adaptive, which means it makes execution decisions based on real-time market events and also it adapts its self to both the market and sell side's tarding infrastructure in real-time. It hunts liquidity in both lit and dark pools using the same algo. One of the main advantages of ASOR is that it incorporates the use of historical execution statistics into decision making process. For example, there is a feature called Probability of Execution, which finds optimum venues for passive orders
within lit venues, and also gives some level of stock opacity within dark pools
. The audit trail
feature of the ASOR is particularly useful to prove the best execution
policy as it shows the entire decision making process as well as a snapshot of the market. Quod Financial offers the ASOR also as a SaaS (Software as a Service
), i.e. a hosted solution, based in London Interxion
data centre with FIX connectivity. This allows market participants to connect cost effectively to Quod Financial’s Smart Order Routing and connectivity solutions.
and Dodd-Frank Ready application module, which allows brokers to take care of their crossing opportunities. It can be combined with a dynamic SOR, enabling the user to work orders externally and cross internally when crossable flow is available.
that allows continuous streaming to web pages. The AOLT is designed for retail broker, who in turn provide this application to their investors. The investors get the full trading functionalities to trade online. One of the advantages of AOLT is that it calculates the buying power of the investors. Also brokers can manage their relationships with their investors as well as pushing complementary data such as quotes and research to them.
It also uses Informatica
’s Ultra Messaging Streaming Edition (UMSE), Ultra Persistence Edition (UMP) and Ultra Messaging Queuing Edition (UMQ) in its underlying architecture.
AEP's modules include: trading-specific algorithm
ic engine, order and quote management
, connectivity and middleware
.
. It also has an open C++ API that allows users to create, customise and extend the algorithms.
or through FIX connectivity and proprietary gateways. Quod Financial has its own FIX engines versions 4.2 to 5.0. The Market Data FeedHandler provides native exchange and other venue FeedHandlers, as well as leading market data
providers.
and Informatica
(29West) that provide dual support for financial message information and market data using a publish/subscribe distribution. These modules do load balancing, are highly scalable and have fault tolerance
mechanisms.
) model, a hosted model, the software is installed at one of Quod Financial's proximity data centres. In this model economies of scale
is applied to application operations and hence users can take advantage of reduction of overal cost. In general, there are a number of advantages in using SaaS:
Algorithmic trading
In electronic financial markets, algorithmic trading or automated trading, also known as algo trading, black-box trading or robo trading, is the use of electronic platforms for entering trading orders with an algorithm deciding on aspects of the order such as the timing, price, or quantity of the...
, smart order routing
Routing
Routing is the process of selecting paths in a network along which to send network traffic. Routing is performed for many kinds of networks, including the telephone network , electronic data networks , and transportation networks...
and internalisation of liquidity
Market liquidity
In business, economics or investment, market liquidity is an asset's ability to be sold without causing a significant movement in the price and with minimum loss of value...
. The firm provides electronic trading
Electronic trading
Electronic trading, sometimes called etrading, is a method of trading securities , foreign exchange or financial derivatives electronically...
solutions to liquidity venues, exchanges, retail brokers, buy side
Buy side
Buy-side is a term used in investment banking to refer to advising institutions concerned with buying, rather than selling, assets or securities...
and sell side
Sell side
Sell side is a term used in the financial services industry. It is a general term that indicates a firm that sells investment services to asset management firms, typically referred to as the buy side, or corporate entities...
institutions.
The company is headquartered in London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
with offices in Paris
Paris
Paris is the capital and largest city in France, situated on the river Seine, in northern France, at the heart of the Île-de-France region...
and New York
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...
. It has teamed up with Catena Technologies in Singapore
Singapore
Singapore , officially the Republic of Singapore, is a Southeast Asian city-state off the southern tip of the Malay Peninsula, north of the equator. An island country made up of 63 islands, it is separated from Malaysia by the Straits of Johor to its north and from Indonesia's Riau Islands by the...
, to take advantage of liquidity fragmentation in the Asia
Asia
Asia is the world's largest and most populous continent, located primarily in the eastern and northern hemispheres. It covers 8.7% of the Earth's total surface area and with approximately 3.879 billion people, it hosts 60% of the world's current human population...
Pacific.
History
Quod Financial was formed in 2004 via the business acquisition of Reuters Mercury Online, which also used to be a trading technology provider.Application Modules
Quod Financial's application modules include smart order routing for buy sideBuy side
Buy-side is a term used in investment banking to refer to advising institutions concerned with buying, rather than selling, assets or securities...
and sell side
Sell side
Sell side is a term used in the financial services industry. It is a general term that indicates a firm that sells investment services to asset management firms, typically referred to as the buy side, or corporate entities...
firms, modules for cross-asset and multi-asset trading, as well as online trading for retail and institutional brokers.
Adaptive Smart Order Router (ASOR)
ASOR is designed for the sell side firms and supports equityEquity (finance)
In accounting and finance, equity is the residual claim or interest of the most junior class of investors in assets, after all liabilities are paid. If liability exceeds assets, negative equity exists...
and derivative
Derivative (finance)
A derivative instrument is a contract between two parties that specifies conditions—in particular, dates and the resulting values of the underlying variables—under which payments, or payoffs, are to be made between the parties.Under U.S...
asset classes. The nature of the ASOR is dynamic and adaptive, which means it makes execution decisions based on real-time market events and also it adapts its self to both the market and sell side's tarding infrastructure in real-time. It hunts liquidity in both lit and dark pools using the same algo. One of the main advantages of ASOR is that it incorporates the use of historical execution statistics into decision making process. For example, there is a feature called Probability of Execution, which finds optimum venues for passive orders
Order (exchange)
An order in a market such as a stock market, bond market, commodity market or financial derivative market is an instruction from customers to brokers to buy or sell on the exchange.These instructions can be simple or complicated...
within lit venues, and also gives some level of stock opacity within dark pools
Dark liquidity
In finance, dark pools of liquidity also referred to as dark liquidity or simply dark pools is trading volume or liquidity that is not openly available to the public. The bulk of these represent large trades by financial institutions that are offered away from public exchanges so that trades are...
. The audit trail
Audit trail
Audit trail is a sequence of steps supported by proof documenting the real processing of a transaction flow through an organization, a process or a system.....
feature of the ASOR is particularly useful to prove the best execution
Best Execution
Best execution refers to the obligation of an investment services firm executing orders on behalf of customers to ensure that the prices those orders receive reflect the optimal mix of price improvement, speed and likelihood of execution...
policy as it shows the entire decision making process as well as a snapshot of the market. Quod Financial offers the ASOR also as a SaaS (Software as a Service
Software as a Service
Software as a service , sometimes referred to as "on-demand software," is a software delivery model in which software and its associated data are hosted centrally and are typically accessed by users using a thin client, normally using a web browser over the Internet.SaaS has become a common...
), i.e. a hosted solution, based in London Interxion
Interxion
Interxion is a European provider of carrier-neutral colocation data centre services. Founded in 1998 in the Netherlands, the firm was publicly listed on the New York Stock Exchange on January 28, 2011...
data centre with FIX connectivity. This allows market participants to connect cost effectively to Quod Financial’s Smart Order Routing and connectivity solutions.
Adaptive Cross (ACross)
ACross, a MiFID IIMiFID
The Markets in Financial Instruments Directive as subsequently amended is a European Union law that provides harmonised regulation for investment services across the 30 member states of the European Economic Area...
and Dodd-Frank Ready application module, which allows brokers to take care of their crossing opportunities. It can be combined with a dynamic SOR, enabling the user to work orders externally and cross internally when crossable flow is available.
Adaptive Online Trader (AOLT)
AOLT is a multi-asset web-based trading application module. AOLT is based on Microsof's Silverlight technologyMicrosoft Silverlight
Microsoft Silverlight is an application framework for writing and running rich Internet applications, with features and purposes similar to those of Adobe Flash. The run-time environment for Silverlight is available as a plug-in for web browsers running under Microsoft Windows and Mac OS X...
that allows continuous streaming to web pages. The AOLT is designed for retail broker, who in turn provide this application to their investors. The investors get the full trading functionalities to trade online. One of the advantages of AOLT is that it calculates the buying power of the investors. Also brokers can manage their relationships with their investors as well as pushing complementary data such as quotes and research to them.
Adaptive Execution Platform (AEP)
AEP is a high performance/low latency multi-asset platform that is inherent in all the above application modules and comply with the new SEC ruling prohibiting Naked Access.It also uses Informatica
Informatica
Informatica Corporation is a NASDAQ listed company with ticker INFA. Founded in 1993, its headquarters is in Redwood City, California. Founded by Diaz Nesamoney and Gaurav Dhillon...
’s Ultra Messaging Streaming Edition (UMSE), Ultra Persistence Edition (UMP) and Ultra Messaging Queuing Edition (UMQ) in its underlying architecture.
AEP's modules include: trading-specific algorithm
Algorithm
In mathematics and computer science, an algorithm is an effective method expressed as a finite list of well-defined instructions for calculating a function. Algorithms are used for calculation, data processing, and automated reasoning...
ic engine, order and quote management
Order management system
An order management system, or OMS, is a computer software system used in a number of industries for order entry and processing.- Electronic commerce and catalogers :...
, connectivity and middleware
Middleware
Middleware is computer software that connects software components or people and their applications. The software consists of a set of services that allows multiple processes running on one or more machines to interact...
.
Algorithmic Engine (AE)
The Algorithmic Engine is an adaptive financial event processing engine that understands the relationship between parent and child orders, different order types and market events. It supports a library of the most important and common execution algorithms such as TWAP and VWAPVWAP
In finance, volume-weighted average price is the ratio of the value traded to total volume traded over a particular time horizon . It is a measure of the average price a stock traded at over the trading horizon....
. It also has an open C++ API that allows users to create, customise and extend the algorithms.
Order & Quote Management (OMS)
This module is designed for sell side instititions and manages the whole lifecle of an order. Quod Financial's OMS also takes care of pre-trade risk management and real-time functions such as position keeping, P&L and care management.Connectivity
The AEP is set up to handle upstream and downstream data systems through native gateways using an APIApplication programming interface
An application programming interface is a source code based specification intended to be used as an interface by software components to communicate with each other...
or through FIX connectivity and proprietary gateways. Quod Financial has its own FIX engines versions 4.2 to 5.0. The Market Data FeedHandler provides native exchange and other venue FeedHandlers, as well as leading market data
Market data
In finance, market data is quote and trade-related data associated with equity, fixed-income, financial derivatives, currency, and other investment instruments. Market data is numerical price data, reported from trading venues, such as stock exchanges...
providers.
Middleware
Quod Financial leverages two reliable and low latency messaging solutions, called TIBCO RendezvousTIBCO Rendezvous
TIBCO Rendezvous is a software product that provides a message bus for enterprise application integration .-Details:TIBCO provides messaging APIs in C, C++, Java, Visual BASIC, Perl and .NET to receive data feeds on MS Excel spreadsheets and other applications of choice.The basic message passing is...
and Informatica
Informatica
Informatica Corporation is a NASDAQ listed company with ticker INFA. Founded in 1993, its headquarters is in Redwood City, California. Founded by Diaz Nesamoney and Gaurav Dhillon...
(29West) that provide dual support for financial message information and market data using a publish/subscribe distribution. These modules do load balancing, are highly scalable and have fault tolerance
Fault-tolerant system
Fault-tolerance or graceful degradation is the property that enables a system to continue operating properly in the event of the failure of some of its components. A newer approach is progressive enhancement...
mechanisms.
Application Delivery Models
There are two types of delivery models for all application modules at Quod Financial.Enterprise Model
In Enterprise model the application module is installed on client's data centre and maintained by themselves.SaaS Model
In the Software-as-a-Service (SaaSSoftware as a Service
Software as a service , sometimes referred to as "on-demand software," is a software delivery model in which software and its associated data are hosted centrally and are typically accessed by users using a thin client, normally using a web browser over the Internet.SaaS has become a common...
) model, a hosted model, the software is installed at one of Quod Financial's proximity data centres. In this model economies of scale
Economies of scale
Economies of scale, in microeconomics, refers to the cost advantages that an enterprise obtains due to expansion. There are factors that cause a producer’s average cost per unit to fall as the scale of output is increased. "Economies of scale" is a long run concept and refers to reductions in unit...
is applied to application operations and hence users can take advantage of reduction of overal cost. In general, there are a number of advantages in using SaaS:
- Lower integration/setup fees
- Flexible and highly customisable environment
- Quick and easy connectivity via FIX
- Seamless maintenance, upgrade and support
- Highly scalable via horizontal & verticalScalabilityIn electronics scalability is the ability of a system, network, or process, to handle growing amount of work in a graceful manner or its ability to be enlarged to accommodate that growth...
scaling