Trading Technologies International (TT) has acquired TRAFiX, adding global equities and equity options to its platform as the company continues to expand beyond its futures and options business.
The transaction, announced September 30, brings TRAFiX’s order and execution management systems and FIX connectivity capabilities into TT. Terms of the deal were not disclosed.
TT said the acquisition extends its coverage from futures and options, foreign exchange, fixed income, commodities and digital assets into global equities and equity options.
Justin Llewellyn-Jones, CEO of Trading Technologies, said TT had been looking to add equities and equity options for some time.
“TT was traditionally a futures and options solution, and then we’ve organically added fixed income and FX, but that really made us more of a FICC (fixed income, currencies and commodities) solution,” Llewellyn-Jones told Traders Magazine. “We needed the cash equities, equity options component to round out the solution.”
He also pointed to broader changes in the market, including shorter settlement cycles and a growing focus on managing capital, risk and margin intraday.
Walter Fitzgerald, Co-Founder and CEO of TRAFiX, told Traders Magazine that customer demand was another factor behind the combination.
“What’s also driving this is customers who are requesting that the technology vendors provide them with a much better innovative solution, a multi-asset global platform, so that they can grow their businesses and run them more efficiently,” Fitzgerald said.
Michael Ottrando, Managing Director, Global Head of Sales at TRAFiX, said that over the years, both companies had heard similar requests from clients, but from opposite directions, with TT clients asking for equities and TRAFiX clients asking for futures.
“That’s the direction that both firms were being pushed by the customers,” Ottrando said.
He said bringing the platforms together would also give clients a central system through which they could view risk and P&L across their trading activity in real time. The TT platform
includes execution and order management, FIX and market connectivity, multi-asset risk management and analytics, regulatory reporting, trade surveillance, compliance workflows and margin analytics.
Llewellyn-Jones said one objective is to reduce the number of separate systems firms use when trading across asset classes.
He described the problem as a “swivel effect,” where a trader executing a multi-asset or cross-asset strategy may have to work across three or four different execution management systems.
“What we’re doing is getting rid of some of the friction points around that swivel effect, and we’re enabling firms to get rid of redundant and duplicative systems,” he said.
Fitzgerald said combining the companies’ connectivity networks should also give customers broader access to liquidity sources globally.
“We both have very robust networks where we connect to all the venues, exchanges, brokers, algos, etc. in our given space,” he said.
Ottrando said trading desks have also evolved, with the same people increasingly trading across multiple asset classes and regions rather than working within individual markets.
He said having those activities within one application could also give compliance teams a consolidated view.
“From a compliance level at the firm, you will be able to see everything in one location across multi-asset, multi-region. Whereas in the past they would have different applications for that. To see everything in real time from one platform is a tremendous asset,” he said.
Llewellyn-Jones said TT does not intend to operate TRAFiX simply as another standalone system within a collection of businesses.
“We do not want to be a portfolio-based organization. We want to be a platform,” he said.
TT plans to integrate TRAFiX into its platform, although Llewellyn-Jones said the companies will take a measured approach to bringing the systems together.
He said the technology integration should be relatively straightforward because the companies operate on modern and similar technology stacks. The more complex task will be preserving the workflows and functionality traders expect within individual asset classes and jurisdictions.
“We’re going to take our time over the next six months to really understand how we bring these workflows together in a way that is additive and valuable to the trader,” Llewellyn-Jones said.
He also pointed to the amount of legacy technology still used across the industry, saying much of that software will need to be modernized over the next five to 10 years. Moving toward more modern, modular technology could also make it easier for firms to access and interact with data and use newer technologies, including AI, he said.
Looking ahead, Llewellyn-Jones said TT’s expansion is unlikely to end with TRAFiX.
He described the company’s strategy as a “multi-X journey” spanning asset classes, workflows and geographies, with clients seeking access to liquidity across a growing range of markets.
“One day, I would like a trader to be able to wake up and see they can trade anything on TT,” Llewellyn-Jones said.
Future expansion will not necessarily come exclusively through acquisitions, according to Llewellyn-Jones. He pointed to capabilities TT has developed organically in areas including FX and fixed income, saying the company will continue to consider whether to build, buy or partner as it adds functionality.
Another area the companies are watching is the shift toward around-the-clock markets. Llewellyn-Jones said the challenge is not limited to keeping technology running continuously, as clients are also working through how to operate trading and post-trade functions on a 24/7 basis.
“Supporting 24/7 trading is going to be something everyone will have to do,” Fitzgerald said.
