Our Customer Spotlight series showcases the innovative ways our clients are using Xignite’s Cloud APIs to power their applications.

AlphaClone is a San Francisco-based investment management firm that enables investors to “follow the smart money” with equity strategies that mirror the world’s top hedge funds. In addition to investment management services, AlphaClone also offers a powerful online research platform that investors can use to analyze stocks and to create and backtest their own cloning strategies.

Xignite sat down with Mazin Jadallah, Founder and Chief Executive Officer, to learn more about AlphaClone.

Q: Describe AlphaClone’s service offering.

Mazin Jadallah – AlphaClone is a SEC registered investment adviser and research firm. Our objective is to give investors actionable, cheaper, more liquid access to the investment ideas of the world’s top institutional investors. Our investment research approach, a process called “cloning”, utilizes top hedge fund public disclosures to construct and backtest equity investment strategies.

Q: Very interesting concept. . . does cloning actually work?

Mazin Jadallah – Yes, cloning the investment strategies of top money managers has been independently shown by academic and industry research to generate alpha returns. AlphaClone offers investors several core investment strategies inside managed accounts as well as a web-delivered subscription research service.

AlphaClone enables investors to backtest cloning strategies before investing real money.

Q: How are the managers/funds in the AlphaClone database chosen?

Mazin Jadallah – The funds in the AlphaClone database represent roughly 70% of the total market value disclosed by all funds that file 13F-HR forms. Our fund database generally contains the largest institutional funds and hedge funds as measured by the total market value disclosed on their filings. Most of the managers AlphaClone tracks are fundamentals driven, value-oriented investors. We tend to avoid funds that are owned or operated by prime brokers, those with large ETF businesses, and those with very high turnover.

Q: Describe the technology behind AlphaClone and the advantages of Xignite Cloud APIs?

Mazin Jadallah – AlphaClone uses Xignite to pull in real-time price quotes. Simply put, when we compared Xignite’s cloud-based model with others we found it to be more reliable, cheaper, and perhaps most importantly, simple to implement. It’s hard to imagine making it any easier to incorporate market data in an application. By relying on Xignite for standard market data, it allows us to focus our development resources on areas of our service that provide us with a differentiated advantage.

Q: What are AlphaClone’s plans for the future?

Mazin Jadallah – Besides enhancing the AlphaClone research service with new features and applications, we’re planning to offer investors new ways to access our disclosure-based hedge fund replication strategies.  That includes things like ETFs and mutual funds which allow both individual investors and professional money managers easy, convenient, and cost-effective access to our investment strategies. As a technology-driven asset manager, our focus will always be on leveraging technology in new and useful ways to empower investors.

Our Customer Spotlight series showcases the innovative ways our clients are using Xignite’s Cloud APIs to power their applications.

Quantbench is a San Francisco-based start-up that combines a unique marketplace for non-traditional data sets, with a financial data analysis platform for financial analysts, academics and data scientists. This 100% cloud-based financial research platform provides its members with the data sets and tools necessary to conduct deep quantitative analysis.

Xignite sat down with Stefan Petry, Co-Founder and Chief Operating Officer, to learn more about Quantbench.

Q: Describe the Quantbench platform?

Stefan Petry – Quantbench combines a cloud-based platform for unstructured data exploration and analysis, with a marketplace where investment researchers and fund managers can purchase non-traditional data sets.

The platform includes data sets that we and others provide. Right now our members have access to more standard market data sets such as tick-by-tick and end-of-day stock data, and indices data. In time, we will be adding more and more non-traditional data sets that are sourced from areas like web search, online advertising, news, social media etc.  Users can perform analyses using R-Project and Amazon Elastic MapReduce. They can also purchase certain data sets in our marketplace for download and in-house processing.

Q: Describe the technology behind Quantbench and the advantages of Xignite Cloud APIs?

Stefan Petry – Perhaps the most innovative part of our approach is that we make it easy for our users to get up and running quickly. Everything that a financial analyst or data scientist needs to conduct quantitative analysis is instantly available. We are able to achieve this because the technology behind our community is 100% cloud-based. All of the analytical tools, data sets, and infrastructure are on the cloud. This approach also enabled us to launch very quickly, and will allow us to scale efficiently as our community grows.

We use Xignite’s market data cloud because it helped us to execute on Quantbench’s cloud vision. Xignite’s broad data coverage acts as a comparison or benchmark to the other more non-traditional data sets we make available to the Quantbench community.  As we expand we will add more Xignite data sets to our platform. Finally, we really like Xignite’s simple and transparent approach to purchasing market data. All you need to do is visit www.xignite.com, select the desired data set, place it in the Xignite shopping cart, and then pay using a credit card.

Q: What are Quantbench’s future plans?

Stefan Petry – Our platform is still in its early stages. We launched just in November. Broadly speaking there are three areas that we will be focused on in the coming months. First, we will be adding more data sets. This data will include standard data sets, as well as many non-traditional data sets that firms will provide to our user base for quantitative analysis. Second, we will be extending the functionality of our non-traditional data set marketplace. Third, we will be adding more tools and languages, so that our users can perform more powerful analyses.

Our Customer Spotlight series showcases the interesting ways our clients are using Xignite’s Cloud API’s to power their applications.

StockTwits is the leading social network targeted at the investment community reaching several hundred thousand users on StockTwits.com, and tens of millions through the StockTwits Distribution Network. Since its launch, StockTwits has garnered much praise, including being named by Fast Company as one of the 10 most innovative Web companies, and by Time Magazine, as one of the 50 best websites.

Xignite recently spoke with Francis Costello, Chief Operating Officer, and Chris Corriveau, Chief Technology Officer of StockTwits, to learn more about this fast-growing company.

Q: Describe the StockTwits community?

Francis Costello – StockTwits was founded in 2008 by Howard Lindzon, our CEO. At that time Howard saw the opportunity to create an investing community based around social media. The community allows investors to share their investing ideas in 140-character tweets, all in real-time. The value of StockTwits is very much based on the wisdom of the crowds concept, with 1000’s of our users all contributing to create a unique financial communications platform. StockTwits is fundamentally based on this social construct, and is very different from the more established financial media outlets such as CNBC, which involve traditional one-way broadcast communication.

Q: Why has StockTwits been so successful?

Francis Costello – I think there are two main reasons for StockTwits’ success to date. First, StockTwits created and popularized the “$(Ticker)” tag which allows users to follow a twitter stream based on a security ticker. This innovation is at the very center of all that we do. Second, we are very serious about maintaining the quality of the conversation that our community offers. We use both technology and people to curate and monitor the community. We ensure that all of our house rules are strictly enforced.

Both of these aspects mean that our content gets broad distribution across the Internet including CNN Money, Yahoo Finance, and Reuters. It also means that we have been successful in bridging the divide between non-professional and professional investors. Many professionals now use StockTwits’ social stream, to augment their more traditional, news and price streams.

Q: How has Xignite’s market data Cloud API’s helped StockTwits?

Chris Corriveau – StockTwits has obviously experienced huge growth in the last few years. Because of this we try to keep our development as agile and as lean as possible. We look for technologies and partners that will allow us to maintain this rapid rate of development. The Xignite service is so vital to us because Xignite’s real-time pricing provides our users with instant context for StockTwits’ social stream. We found Xignite’s Cloud API’s to be very easy to work with and implement, offering multiple data formats. We’ve also discovered, that as StockTwits expands internationally, Xignite’s broad global coverage means that adding international market data is a simple and straightforward proposition.

Q: What are StockTwits plans for the future?

Francis Costello – Apart from growing the community here in the US, and expanding overseas, our other priority is to introduce more services for our professional users. The main difference with the professional market is that while StockTwits has obvious appeal, the needs of professionals can be very different from our non-professional users. Frequently many of the markets these professionals operate in are highly regulated. In June of this year we launched StockTwits Investor Communications Solutions, which are services that allow public corporations and investor relations professionals, to really take advantage of the StockTwits platform to communicate directly with investors. The service includes features like compliance functions that address the unique legal challenges presented by regulated communications in social media. As we offer more and more services to professionals, we will continue to tailor our solutions to the needs of different groups in this market.

Our Customer Spotlight series showcases the interesting ways our clients are using Xignite’s Cloud API’s to power their applications.

Xignite would like to introduce you to Personal Capital, which was just launched in September, but already has made quite an impact in the wealth management industry winning  “Best in Show” at Finovate Fall 2011, and being described by Bloomberg Businessweek as “Wealth Management for the Internet Age”.

Personal Capital’s goal is to offer a simple wealth management solution for the complex lives of their affluent clients.  The firm was founded by some of the leading financial technology and e-finance executives, and is backed by a well-known Silicon Valley venture capital firm.

We recently sat down with Bill Harris, Chief Executive Officer of Personal Capital, who was formerly CEO of PayPal and Intuit, and Jay Shah, Chief Information Officer of Personal Capital, who was formerly CIO of E-Loan.

Q: Why was Personal Capital created?

Bill Harris – We really created Personal Capital to fill a gap that most of us feel in our everyday lives, that is how to manage our financial lives, when everything is so fragmented.  Many of us have brokerage accounts, IRAs, 401ks, checking accounts, credit cards, mortgages, all strewn across multiple institutions, but there is no one place to go to make sense of it all. No one place where we can make a rational decision about our finances and plan for the future. Personal Capital was formed to allow people to make sense of their complex lives, in a comprehensive way, so that they can then take action.

Q: How does Personal Capital work?

Bill Harris – It really only takes 15 minutes to understand the power of Personal Capital.  The first 5 minutes you spend linking all of your accounts to the Personal Capital website. This allows Personal Capital to assemble a baseline of your financial situation on at least a daily basis.  The next 5 minutes minutes Personal Capital presents you with an easy to understand analytic framework that gives you a graphical representation of your entire financial situation. Finally, in the last 5 minutes we recommend the ideal asset allocation based on your financial profile and other factors. All of this is for free. At this point you can then decide whether you want to work with one of Personal Capital’s advisors so that we can help you manage and implement your financial plan.

Q: How is Personal Capital different from a more traditional wealth manager or investment advisor?

Bill Harris – There are a few significant differences but perhaps the biggest is the mode of interaction. With a more traditional approach much more face to face interaction is required, otherwise you don’t get very much visibility into your finances. At most you probably get sent a statement every quarter or so but that’s it. Just establishing your relationship with a traditional wealth manager can be a pain. It typically involves three trips to your advisor: (1) You drive to the advisor’s office to decide whether you want to do business with them. (2) You then get back in your car to go home to gather all of your financial documents into a shoebox and then deliver it back to the advisor. (3) Finally you return to the advisor when they have made sense of your financial situation and are ready to make recommendations. Obviously, this mode of interaction just doesn’t work for busy people. Personal Capital is different, we offer multiple ways to interact with us in real-time. We let our clients decide what works for them.

Q: Why has the wealth management industry evolved so slowly?

Jay Shah – There is no doubt that it has been slow. We have seen some innovation in the tools used by the wealth manager, but these are designed for the advisor and do not really impact the client directly. We’ve also seen progress on the self-directed side with online brokerage accounts but essentially the experience of the traditional wealth manager client has not changed much over the years.

Bill Harris – I think it has definitely has been slow. When I look at the last almost 100 years the two biggest innovations that come to mind have been the brokerage account, which was developed in the ‘20’s, and the mutual fund, which was developed in the ‘60’s. The brokerage account allowed individuals access to a variety of investments. They could, for the first time, personalize their investment choices. It is very much the craftsman model. The mutual fund, and more recently the ETF, have allowed an efficient way to access professional investment combined with the ease of buying and selling. Mutual funds, however, are about mass production, one size fits all. The next innovation that Personal Capital is a part of, will combine the personalization of the brokerage account, with the efficiency of the mutual fund industry.  This mass customization of the wealth management industry is being made possible by the Internet and other technologies.

Q: How would you describe Personal Capital’s investment philosophy?

Bill Harris – Our approach is based on today’s accepted academic investment theory. We do not seek to beat or time the market. We are not about generating alpha.  For us the most important long-term decision is the allocation decision. We are also very focused on risk management, and are aware of how harmful volatility can be. Once we understand our client’s financial situation and goals, we then implement their strategic plan, using mainly individual securities and ETF’s. Finally, we are very tax sensitive. Pre-tax results are not what will help you after retirement.

Q: How has Xignite’s on-demand market data helped Personal Capital?

Bill Harris – I’d first like to say that we at Personal Capital are huge fans of Xignite. Your whole web services approach to market data is as slick as a whistle. We’ve been delighted with our relationship, particularly with your ability to meet our tight time-lines for our September launch.

Really a major part of our business is data management and aggregation. Ultimately, our goal is to provide our clients with a simple financial dashboard, so that they can then make an informed decision about the future. Without Xignite’s real-time market data the information presented to our clients would be stale and not as actionable.

Q: What are Personal Capital’s plans for the future?

Bill Harris – Personal Capital’s future plans are centered around deepening the analysis of our clients’ financial lives, while at the same time broadening our understanding of their entire financial picture. Finally, we will continue to extend that mode of interaction with our clients that we talked about earlier. Our approach is that our clients should be able interact with us anywhere or anytime, through multiple touch-points, without ever having to go to a branch. With this in mind we will be releasing iPad, mobile phones, and some innovative browser-based apps in the very near future.

Our Customer Spotlight series is intended to showcase the interesting ways Xignite’s clients are using our financial market data web services.

StockTouch is an iPad/iPhone app that allows users to quickly understand in a very visual way the overall state of the stock market, and then drill down further to the individual stock level. StockTouch includes a groundbreaking interface that brings together the power of data visualization and Xignite’s financial market data. (Note StockTouch was also mentioned in last week’s Xignite blog post “The 3 Phase Evolution of Buy-side Mobile Apps”.)

Since its launch in June of 2011 StockTouch has already developed quite a following among both retail and professional investors alike. When StockTouch was first introduced the mobile app was immediately rated as “New and Noteworthy” by Apple’s iTune store. User comments have been very favorable including this one from Twitter that captures very nicely what people have been saying about StockTouch:

We recently sat down with Jennifer Johnson, who is CEO of Visible Market Inc., the firm responsible for StockTouch, to learn more about this mobile unique app.

Q: How did you come up with the idea for the StockTouch app?

A: We knew that we wanted to do something in the financial services space. Looking at the mobile apps already out there we felt that they did not really take full advantage of the iPhone/iPad’s touch interface or data visualization abilities. We decided to build an app that would act as a visual access point to the stock market.

Q: How long did it take to develop the Stocktouch app?

A: Development was very fast. We put together a basic demo of StockTouch in March of this year. Because the initial feedback was so favorable we pushed ahead with a full development effort. By late June we were able to launch StockTouch in the iTunes store.

Q: What is it about StockTouch that appeals so much to your users?

A: I think the real uniqueness of the StockTouch mobile app is that it offers a broad topography of the market which then allows the user to very quickly focus in on what is important to them. StockTouch’s intuitive touch interface and its data visualization abilities work very well together to provide this type of top-down analysis of dynamic market data.

Q: How has your relationship with Xignite helped StockTouch?

A: From the very beginning we were able to establish a very productive partnership with Xignite.  There are 3 areas where I feel this relationship really stands out:

1. Speed of deployment – The ease of integrating Xignite’s market data web services allowed us to launch the StockTouch mobile app in a matter of months.
2. One-stop shop – It is reassuring to know that as we add different types of market data to StockTouch we won’t need to seek out another source of data, since it is all available on Xignite’s platform.
3. Focus – Perhaps the biggest benefit of our partnership with Xignite, and their web services approach to market data, has been the fact that we don’t have to spend valuable time building out and managing an entire data management infrastructure. Instead, we can focus all of our efforts on where we add value, which is in the areas of UI and data visualization.

A good example of the value of this partnership was when we were about to launch StockTouch. At the last minute we decided we needed to add stock news to the app. All it took was a call to Xignite, some minor development, and literally in a matter of days we were able to launch with this key feature….

Q: What are your plans for the future of StockTouch?

A: We are constantly adding new features to StockTouch. Just this week, we released Version 1.3. This release adds new views such as Winners and Favorites, and is compatible with Apple’s new iCloud service. Looking to the future we will give users the ability to add their own portfolios to StockTouch. We also have plans to add more analytics to the platform…

Click below to view a short demo of the StockTouch mobile app:

stocktouch from svanes on Vimeo.

The was plenty of market data cloud buzz at the 2010 SIFMA Technology Conference and Exhibition with NASDAQ and Xignite right in the center. Using the XigniteOnDemand Market Data Cloud Platform, NASDAQ plans to launch Data-on-Demand in the second half of 2010 to provide easy and flexible access to large amounts of detailed historical NASDAQ Level 1 trade and quote data for all U.S.-listed securities. Tick data is increasingly in demand for back testing of algorithmic trading strategies as the securities industry pushes the limits of high frequency trading.

Randall Hopkins, NASDAQ OMX’s Senior Vice President of Global Data Products, is quoted in the press release as saying: “Today our customers spend a large amount on technology infrastructure, not the market data itself. With Data-on-Demand, we want to drastically cut data management costs by running the technology infrastructure on the cloud for our clients and delivering to them the data they need, when they need it, and how they need it.”

NASDAQ discusses it’s market data cloud initiative with Max Bowie
of Inside Market Data at the 2010 SIFMA Financial Services Technology Expo

Obtaining and collecting tick data can be onerous and time-consuming as firms are required to establish feeds and maintain large amounts of data on-hand. On-demand market data distribution gives applications a way to cherry pick the specific subset of data that the application needs with pinpoint accuracy. Instead of combing through very large data sets of historical tick data, developers will be able to program their applications to select very specific data sets and obtain them on-demand and process them instantly. Data-on-Demand will also allow clients to download large tick data subsets on a scheduled basis.

We’re proud to announce that CME Group, the world’s leading and most diverse derivatives marketplace, is jumping on the cloud computing bandwagon and has agreed to use the XigniteOnDemand market data cloud platform to deliver OTC data from the cloud.

Brian McElligott, Managing Director of Information Products at CME Group is quoted in the press release as saying “With the ongoing development of our multiple OTC product and service offerings, and the need to deliver this data to customers with continued market transparency, the Xignite platform will be a quick and cost-effective way to get OTC pricing and reference data to our global market participants.”

Pete Harris of the A-Team Group interviews CME Group, BG Cantor and Xignite.
The A-Team Group gave the cloud prime coverage in their recent Q2 issue,
and Pete is launching a new “Market Data Cloud” channel, so stay tuned to that.

CME Group plans to offer on-demand access to end-of-day OTC settlement, volume and open interest data to support markets available through CME ClearPort®, a set of flexible clearing services open to OTC market participants to substantially mitigate counterparty risk and provide neutral settlement prices across asset classes. CME ClearPort currently clears more than 500,000 contracts daily, including Credit Default Swaps (CDS), energy, metals, agricultural commodities and foreign currencies. The service brings together more than 10,000 global users across the world including banks, hedge funds, trading entities, Inter Dealer Brokers (IDBs), Future Commission Merchants (FCMs), and clearing firms.

Now that the cat’s finally out of the bag on BGCantor’s new on-demand web services, I can finally take the readers of the Xignite blog back stage for a “behind the scenes” look at the making of the biggest initiative in the on-demand financial web services world since the start of Xignite.

BGCantor On-Demand offers fixed income and derivatives data via on-demand web services using Xignite’s core platform.

What happened behind the scenes?  How did this new on-demand business get launched?  And what did it take to launch it?  Well, first and foremost, it took a great team at BGCantor Market Data.  The BGCantor team was absolutely delightful to work with.  Everyone was highly knowledgeable, very responsive, dedicated to accomplishing the mission and very excited about the whole project.  We couldn’t have asked for a better group to work with.

Together, the BGCantor/Xignite team started by designing web services to be truly application-ready, combining Xignite’s web service experience with BGCantor’s in-depth market data knowledge.  Then we coded the web services on top of the XigniteOnDemand market data distribution platform for rapid development on a robust, high-performance, highly scalable architecture.  At the same time, we also built the BGCantor On-Demand website and tightly integrated it with the web services themselves.  To help manage the new on-demand business, we also deployed an administrative portal for on-going management of customer accounts.  At the same time, on the sales and marketing front, we worked together to find just the right usage-based pricing model to drive strong revenue growth for BGCantor while also delivering exceptional value for BGCantor’s customers.  Then we collaborated on developing marketing collateral and sales tools.

As for showing you blooper videos of our behind-the-scenes footage, I’m afraid I couldn’t quite convince Legal to sign off on that. Sorry. Maybe next time.

Index Oasis, a company focused specifically on index analysis, is helping financial advisors, money managers and investors to manage their portfolios more wisely, with a web-based software platform. At the center of the Index Oasis system is a new web service offered by Xignite, XigniteIndexComponents.  This Financial Web service provides lists of securities and weightings that are used to calculate over 40  U.S. stock indices.  While XigniteIndexComponents is a fairly simple service, it is the industry’s first on-demand Web service to provide Index Component data.

To us, Index Oasis illustrates how companies can leverage our on-demand platform to obtain only the data that is needed, without the heavy up-front investment in infrastructure, ongoing maintenance costs and lengthy development efforts. By utilizing Financial Web services, Index Oasis realized huge savings in time, development and infrastructure investment, accelerating time to market by 35% and reducing data integration to fewer than 10 lines of code.  This is what Xignite Web Services it is all about, saving time, effort and money.

If you’d like to read more, there is more detail in this feature article by Inside Market Data (you’ll have to register if you are not a regular reader of the site), or you can check out the index components press release.

If you will be in NYC for the Cloud Computing Expo on March 30, then be sure to check out the Forbes.com – Xignite session.  While much of the program is how-to/technical in nature, this will be one of the few real world cloud computing case studies presented at the Expo.

Click the image for a full session description

We’ll be discussing how we brought BATS Exchange real-time quotes to Forbes.com using the Xignite financial Web services platform and Amazon Web Services EC2. Many thanks to Forbes.com for getting us up with the allstar list.  Great headshot Jeff!