Traders can now get real-time execution and order-flow risk analysis right on their desktops, which is expected to help them trade more efficiently and quickly.
San Francisco-based 4th Story offers trading desks and brokers a full suite of analytics, data visualization and notification features. The tasks of risk analysis, which in the past were done either at the end of the day or week, now are done in real time monitoring all of a trader’s orders and trades.
The system looks for outlier orders or positions that can cause a trading problem.
Both the buyside and sellside can see real-time analysis and alerts visually via heat maps and grid charts. Users can click on an alert when it appears to determine the risk profile of an order. They can then decide whether to send the order or cancel it.
Here’s how it works. Based on historical patterns stored in 4th Story’s database, the risk analysis software looks for outlying orders outside of historical patterns and identifies them, chief executive Steve Smith told Traders Magazine. Once identified, the trader is alerted and can decide to cancel an order, revise it or send it unchanged.
“This system was first offered to only buysiders, but we’ve now expanded it to the brokers. Brokers can, in turn, now offer this to whichever clients they choose,” Smith said.
The system is designed to work with most order and execution management systems and makes a copy of the order’s FIX messages. From that message, it does a real-time analysis. The front end is browser-based to speed deployment.
Risk alerts come either via email or from the Web browser running the system, Smith added.
