How to Get Global Market Data

How to Get Global Market Data

February 3rd, 2020 - Financial, Global Connectivity

By Jeff Mezger, Director of Product Management

In today’s global trading landscape, financial market participants that need market data will almost always require it from multiple exchanges. Widening trade portfolios have led investment firms to create unique and diverse connectivity demands that place incredible burdens on the teams responsible for establishing their infrastructures. Even when connections traverse more established routes, like Tokyo to London, a wealth of factors need to be addressed.

The trick with accessing global market data is to critically evaluate whether a ‘do-it-yourself’ approach is cost effective and realistic within your situation parameters or if partnering with a vendor would provide a more strategic solution.

Can you talk the talk?

The primary challenge is to establish a relationship with all the exchanges you wish to access.  The exchange members will provide vital guidance on the rules of engagement for each, but you need to consider language, cultural and time-zone factors to ensure a suitable outcome. If you are attempting to access multiple exchanges this is typically extremely difficult, time consuming and complex, and it’s no surprise that many find this first hurdle insurmountable.

Whether you chose the DIY approach or explore vendor options, these are some of the key questions to ask to begin with:

  • What are the connectivity options?
  • Where is the exchange located?
  • What agreements must be put in place?
  • How does this differ from the other agreements you have in place with other exchanges?

Expect the answers to all the above to be totally different, as each exchange operates in its own unique way, following its own individual set of principles and protocols. I’ve spent almost 20 years working in this industry and am confident in saying that no two exchanges are alike.

Can you walk the walk?

While the DIY approach might meet a company objective to keep things in-house, it typically consumes a greater budget. Exploring the opportunity and understanding the rules of engagement, as we’ve discussed above, can generate a substantial start-up cost before you have begun actually building the infrastructure you need.

When building out the point-of-presence, some exchanges will require you to have a local representative, recognized by the exchange, that will work on your behalf. Choosing a vendor with local feet on the ground is a great way to satisfy not just this requirement, but also to ease the commercial challenge of hardware and telco procurement, as well as overcome the difficulties of working within a country in which you don’t operate.

Tapping a global vendor, like TNS, can be more cost effective when it comes to physical connections. They benefit from existing relationships with exchanges and have a comprehensive global network with both connections and capacity already in place. Setting up your own connections mean you have to pay the full connectivity price, where vendors that can spread this across multiple parties can pass on a cost saving to their clients.

It is also important to recognize any time to market criteria your business has. The DIY approach can take months to establish exchange relationships, agree terms and build a presence. Working with a vendor typically reduces this to just days or a few weeks, depending on the exchange in question. Many opportunities are fleeting so if your traders hope to capitalize on an opportunity they have identified right now then a vendor can help you get access to the market much faster.

Network design and engineering factors must be addressed

To be successful, network engineering expertise is essential to ensure adequate capacity and minimize risks, such as packet loss. Organizations, like TNS, that are both a data vendor and network provider already have the required network capacity in place and can offer it at a lower price because of the economy of scale. We can take the multicast market data stream across our network once and then share it with multiple clients as needed, allowing us to offer it at a lower cost than if they did this themselves.

Packet loss can lead to missed trade opportunities, so if you are managing your own DIY infrastructure you need to ensure you have dedicated engineering expertise in-house that knows how to design and manage to minimize loss. The network also requires diverse paths for both the A and B market data feeds to ensure continuity.

Ensure provision for effective monitoring and support so that if something does go wrong anywhere along the connection path you can quickly identify it and garner details, such as when and where the problem has occurred. Then you must have people available and familiar with the exchange contacts and processes in order to troubleshoot the situation.

Strategize for success

Accessing multiple market data feeds on a global basis is one of the most complex challenges facing financial market participants today. Doing it well can offer competitive advantage, boost reputation and bolster the bottom line so it deserves careful consideration.

Even the largest players find it complex, time consuming and costly, which is why TNS has dedicated so many years to building one of the best networks around to specifically relieve this burden. If you are tasked with accessing market data, I encourage you to take a closer look at how we can help.

TNS knows how to engineer networks to deliver market data on a global basis. We have the expertise, existing relationships with exchanges, local teams in-country and a truly global reach. We can help you set up a flexible market data infrastructure quicker and at a lower cost. This will enable you to address new market opportunities in a shorter timeframe and begin realizing subsequent revenue much earlier. Traders can also test markets in this way, avoiding significant capital outlay.

We’re also extremely proud of our TNSXpress architecture which we’re confident is the fastest currently available on the market today with speeds as low as 5 – 85 nanoseconds.

Grab the opportunity to turn your market data network into one of your biggest assets by harnessing the benefits of working with TNS.

Jeff Mezger is Director of Product Management at TNS with responsibility for its managed services for the financial industry. He oversees product development and strategy for market data, online and data center services.

 

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