Case Study: New regulated hedge fund upgrading its technology
The client is a recently AMF approved hedge fund composed of distinct trading, sales and technology teams. They are running automated trading strategies especially in the Forex and Futures markets. They were previously using a common widespread platform in the retail trading community, improved by an in house infrastructure. They also tried to migrate to several known institutional algo trading solutions, but it was satisfactory to them.
Being recently approved by french regulators AMF and scaling their operations, they needed to upgrade their current infrastructure because:
– their current platform was not offering professional connectivity (such as FIX), important for optimal stability.
– in case of problems they consequently had to restart the platform and manage all positions and strategy exit manually.
– too much time was consequently spent in operational support instead of research and development.
– it was impossible to get tailor-made services.
– it was difficult and very slow to get support.
– they were no possibilities to connect to institutional brokerages or banks.
– the institutional packages they tried were not satisfactory.
What is acceptable for a small account or when managing its own money is not for a regulated fund with important investor funds. So they had to find a solution to tackle these issues.
Giving the fact he hedge fund is employing its own development team, the algorithmic trading environment they were looking for had to be opened to their in house developers.
They consequenty started to investigate several flagship institutional algorithmic trading products but the conclusions were:
– the support was lacking of reactivity and disponibility.
– it was requiring a full redesign of all their strategies.
– they had bad experience with code breaking releases.
– it was very expensive.
So the fund was still looking for a better solution when they contacted us.
Req1: Getting a stable FIX connectivity to Interactive Brokers and other venues
AlphaTrader always proposes a FIX connectivity when the option is made available by the brokers or venues, including Interactive Brokers since AlphaTrader 2.7. Cf our current connectivity options.
So even if your platform is down for any reason or if you loose connectivity to your broker, at restart or reconnection, AlphaTrader is able to restore the trading events missed (fills, cancellations, rejects, etc). No need for manual intervention to manage positions to resume trading.
We even propose, whenever possible, hybrid connectors FIX+API in order to get the better stability that can be achieved. You can get further explanations on the article where we discuss the specific case of the LMAX FIX+API hybrid connector.
Regarding Interactive Brokers, we also offer an hybrid FIX+API connector, with the additional option to use a third party data provider such as IQFeed to avoid having to use Interactive Brokers historical data request limitations and their real time data snapshots as primary feed.
Req2: Offering an opened development environment for the client in house developers
Req3: Facilitating rewriting of their strategies and indicators
The client was using a common widespread platform in the retail trading community and had consequently a large code base to migrate to AlphaTrader.
AlphaTrader is really easing the migration process as far as possible thanks to its development environment using:
– the widespread C# programming language
– the common event driven paradigm (more information here)
– the ability to choose between the trade centric and position centric trading modes.
The client specifically underlined the ease they had to migrate their code base in comparaison with other high end institutional products.
Req4: Support reactivity and tailor-made requirements
As part of the Silver Support Package:
– we were able to directly assist the client developers to fasten their onboarding and migration process.
– we provided to the client a dedicated account manager who was bi-weekly gathering the client requirements and getting them prioritised in our development sprints.
– we were shipping private releases to the client every two weeks, for them to get their required functionality as soon as possible.
Our immediate reactivity and disponibility to all their requests or questions was one of the main driver for their adaption of our technology and offer.
Req5: Being opened to institutional brokerages or banks connectivity
We can add a connector on demand, whatsoever the venue, broker or banks, as we are using institutional standard protocols and certification methods.
Moreover we now proposose connectivity to a Forex aggegator. Cf case study: AlphaTrader Enterprise (multi-traders) set-up: Liquidity Aggregation, Prime Brokerage and AlphaTrader Gold Plan.
Req6: Cost effectiveness
Though it was not officially a requirement, AlphaTrader very competitive pricing in comparaison with other institutional packages helped us to win the bid.