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May 5, 2009

CorvilClear Helps Traders Avoid Rush-Hour Traffic

By James Ramage

Market data bottlenecks, or latency, can prevent traders from determining if they're trading in the right venue or at the right price. Market data latency management vendor Corvil wants to help traders measure whether they're trading on stale information.

So it designed CorvilClear to help traders with this by letting them perform a real-time diagnostic. CorvilClear sends continuous latency measurements for every message that travels between traders and their venues, said Donal Byrne, Corvil's chief executive.

"In the world of either high-frequency or latency-sensitive trading, the key to getting a successful trade is being able to trade with the most up-to-date information coming from market data feeds, and being able to get a fill faster than a competing trader," Byrne said. "And this is why the management of latency-and ultimately the measurement of latency-has become a top-of-mind issue for traders."

CorvilClear is basically a sequence of black boxes that reside at the market centers and within the infrastructure of either buyside or sellside firms, close to their trading engines, Byrne said. They patch into the infrastructure of both sides so that they are able to take measurements outside of the data path, he said.

Beyond taking measurements, though, CorvilClear lets traders and venues share views into market data and latency information on a continuous basis.

"So now the trader has full transparency into what the vendor sees, and the vendor has full transparency into what the trader sees," Byrne said.

The two parties agree on the level of transparency. Both enforce the sharing policy to ensure no proprietary information is exposed.

As everything between the firm and the venue-or between trading partners-is covered and measured, traders can then quickly resolve who added latency, why it was there and how to fix it. And once that's done, Byrne added, the trader can use this information to make a better prediction of whether they'll trade successfully at that venue in the future or should switch to another.

Corvil would not say how many customers it has. But Byrne said more than half of its customer base is in New York, Chicago and Boston. And nearly all are in equities. The Dublin, Ireland-based firm cites both pan-European trading platform Turquoise and Credit Suisse's European electronic trading arm as CorvilClear customers.


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