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Tim Quast
Traders Magazine Online News

We're All HFTs Now

In this guest commentary, author Tim Quast looks back at the history of HFT and how the market has evolved to where many firms now fit the definition of high-frequency trader.

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June 30, 2003

The Empire Strikes Back

By Editorial Staff

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  • The Empire Strikes Back

Down, but not out. Competitors are gaining ground on SunGard Trading Systems, the biggest vendor of OMS products in Nasdaq trading rooms. But although SunGard is still a strong player, many former customers have opted to use in-house systems or switched to SunGard competitors, industry players say.

Morgan Stanley, RBC Dain Rauscher and Gerard Klauer Mattison, for instance, have all got rid of SunGard's BRASS OMS in the past year. UBS is likely to do the same, according to trading sources. Meanwhile, SunGard's British competitor, royalblue, is rapidly making inroads into BRASS territory.

At the same time, Lava Trading's market access technology is now trumping SunGard's UMA's front end product in many places.

UMA remained a quote management system while traders were clamoring for more sophisticated technology to deal with a fragmenting market.

However, SunGard has not been asleep at the switch. It added listed trading functionality to BRASS. It is now used by about 90 of its 200 BRASS customers. That represents a huge leap of 60 customers in the past 18 months. Many of those represent defections from the dominant listed OMS vendor NYFIX.

SunGard has also added agency trading functionality to BRASS to help market makers conduct business in a world of penny ticks. In addition, SunGard has improved its sales trading module.

Now SunGard is going after Lava. U2, SunGard's new market access front-end, is in beta testing on two desks. The system, which was built using Microsoft's highly-praised C# (C-sharp) technology, utilizes intelligent algorithms that mimic traders' thought patterns to seek out the best sources of liquidity.

Traders Magazine technology editor, Peter Chapman, spoke with Tom King, STS' chief executive, and Richard Chmiel, an STS' executive vice president.

Traders: Gerard Klauer, when it switched to royalblue recently, complained that Sungard's customer service crew was made up of know-nothing youngsters. How do you plead?

King: Four years ago, we experienced the same difficulties as others when hiring. It was a hot marketplace. It was very difficult to find qualified people to run the support organization and to do development. It was a highly competitive environment for personnel.

Traders: So, you couldn't get experienced people?

King: We had to train them. They were more at the beginning of their learning curve than in the middle or at the end.

Traders: That's changed?

King: Now we can find very qualified people in the advanced stages of learning the trading business. Now we are hiring highly skilled people. Staffing our operation. Expanding the headcount. I believe the GKM situation was an aberration.

Traders: GKM also said your technology was outdated. Now you're introducing U2, a new front-end. Tell me about it.

Chmiel: Admittedly there were some shortfalls in UMA. That allowed some other players to come into the space. Lava Trading, for instance. But our new market access platform utilizes the latest technology.

Traders: What technology underpinned UMA?

Chmiel: MOTIF, an X-Windows application.

Traders: And U2?