What is Algo Trading?
Algorithmic trading uses computer algorithms to automate the trading process, from market analysis to order execution. The key goals are efficiency, speed, and maximizing returns.
Solutions Algo Trading Companies Seek
- Speed and Efficiency: Microseconds matter. Firms are constantly seeking solutions that enhance the speed of market data analysis and order execution to gain a competitive edge.
- Adaptability and Flexibility: Markets evolve, and so must trading strategies. Companies look for solutions that can be easily customized to implement new trading algorithms.
- Risk Management: Mitigating risks is paramount. Solutions that incorporate robust risk management mechanisms are deployed to prevent substantial losses and ensure the security of their trading operations.
Why Custom Algo Trading Software?
- Tailored Custom software is architected with unique and specific requirements in mind.
- Scalable: designed to accommodate increased trading activity without compromising performance.
- Proprietary: When your company owns the software IP, it creates a significant competitive advantage and value for your company.
How Does Connamara Empower Algo Trading?
Connamara, a leading provider of custom software solutions for financial markets, has a significant role in the algorithmic trading landscape.
- Algorithm Implementation: Connamara specializes in the thorough implementation of trading algorithms in code for our clients, taking charge after a company designs its own trading algorithm.
- Infrastructure Construction: Beyond coding, we build the necessary infrastructure to facilitate the execution of trades dictated by the algorithms.
- Algorithmic Trading System Design: Leveraging our expertise, we design the entire trading system and interfaces, allowing traders to effectively control and interact with the algorithms.
- Risk Management: Connamara designs and implements the risk management for the algo system to prevent any unpredictable or undesirable behavior after launch.
- Exchange Connectivity: We establish connections with exchanges to seamlessly transmit orders the algorithm specifies.
- Market Data Integration: Acquiring and integrating market data is a crucial aspect, providing essential inputs for the algorithm to make trading decisions autonomously.
Real-Life Case Studies of Algo Trading Using Custom Software
Connamara provides solutions like algorithmic trading systems for the entire capital markets universe. And while so many of our over 200+ clients’ projects remain under strict NDA, we can share a few examples of our past successes implementing in the algo space.
In this success story, a mid-sized New York City hedge fund that manages assets on behalf of foundations, pension funds, and other institutional and individual investors asked Connamara to build an ultra-low latency algorithmic equity trading platform that could access global metadata for control (risk management, ticket marking, restrictions, locates) and advise changing trading positions.
A project that could have taken this firm over a year to develop in-house, depleting resources and time from an inexperienced team, took just under seven months to launch, thanks to Connamara.
On the first day of production, the in-house Technical Lead remarked on the platform’s perfect report card: “Final tally: 104,670 messages, no errors. I’m declaring Day 1 a success. Thanks for writing solid code!”
Another client, one of the largest banks in the United States, headquartered in the Midwest, was looking for software developers to help them build a FIX Engine that could work with investment-grade bonds. Hearing of Connamara’s industry recognition for our FIX expertise, they made an inquiry.
During discovery, Connamara’s business analysts realized that our clients needed more than a FIX Engine based on the desired features and requirements. They wanted an entire algorithmic trading platform devised from the ground up.
Upon launch, the CEO remarked, “Wow! Did I read this correctly, ‘No issues found’? I do not think I have seen that before on a first scan. Good job to the team!”