Financial Market Data Web Services – Xignite Blog

Technology has led a dynamic transformation of the exchange industry, and cloud strategies are an important factor in unlocking the revenue potential of exchange data.  The following article about how to monetize exchange data via the cloud was recently published in “How To Build An Exchange,” a fascinating must-read collection from our friends at Mondo Visione.  Request access to the full collection from Mondo Visione here. 

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Monetizing Market Data in an Evolving Global Marketplace

The global environment for exchanges and data originators is rapidly evolving with exploding data volumes, increasing and unpredictable regulation, expanding variety of financial instruments, fragmenting market, competitive encroachment and the need for new sources of revenue. Beyond these challenges, the race to microsecond latency will stretch the infrastructure capacities and budgets at major financial services firms.

Exchanges and data originators are struggling to service the opportunities of the future with the products and solutions of the past. A paradigm shift is rapidly approaching as old monolithic systems designed for universal applicability are being replaced by new custom tailored micro and mobile apps designed to satisfy the needs of a specific knowledge worker or user type.

The emergence of new mobile technologies and use-specific applications is altering the usage patterns of market data and changing the ways market data is purchased and consumed. If an emerging exchange is to succeed, it must tackle these issues in new ways.

A few years from now the market data application mix will boil down to two distinct flavors: low latency and everything else. How will exchanges capture new market data revenue profitably and manage the delivery of these two distinct flavors when their target applications, usage patterns and infrastructure requirements are so dramatically different? Read more

The Developer Focus series profiles developers who have built applications using Xignite’s Cloud APIs, highlighting their experiences, observations, and advice.

John Morris is the lead developer and CTO for StockTouch, an innovative financial market data visualization app that is currently the #1 paid financial app in the iTunes Store (read more about StockTouch in our recent Customer Spotlight).

StockTouch’s groundbreaking data visualization interface has received widespread attention from the media and from Apple, who have selected StockTouch as one of the few apps to be loaded on all iPads and iPhones in their Apple Stores worldwide.  We recently sat down with John to learn more about him and the development process behind StockTouch.

Q: Tell us a little bit about your background?

John Morris – I’ve been programming since 1981, mostly as a contractor. My primary focus has been the gaming industry, mainly for two reasons. First, I love games! But perhaps more importantly, game development requires optimizing code at all levels in order to ensure good performance. It’s a challenge I enjoy taking on.

Q: How did you get involved with StockTouch?

John Morris – I learned about the StockTouch project through a mutual friend.  I joined the project initially as a consultant to build the prototype.  As everything came together, I was offered and accepted a position as the co-founder and CTO of StockTouch.

Q: How is the development process for StockTouch structured?

John Morris – The StockTouch team is completely virtual with the core members in New York, Seattle and Los Angeles. There are actually only two of us who are involved on the coding side of StockTouch. I work on the client side, and we have a contractor who works on the server side. We also work very closely with the other members of the team that deal with the overall user experience and feature set.

To build StockTouch, I was initially given just six screenshots, but we always had a pretty clear vision of what we wanted to do. We wanted the app to have a very intuitive interface with a fluid user experience. As a game developer, I personally wanted the application to offer a superior and unique visual experience, backed by extremely powerful features. StockTouch performs its rendering via OpenGL, and we really push the graphical capabilities of the iPad to deliver a cutting-edge experience.

Q: How difficult was the transition to the iOS platform?

John Morris – I’ve been building iOS products since 2008, so it wasn’t an issue for me.  For programmers unfamiliar with iOS, transitioning to the platform is not very easy—there’s a Read more

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 Read more

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 Read more

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 Read more

The Last Hold-Out

The fixed income trading world has been the last hold-out in the broad shift towards electronic trading and more transparent centralized trading venues. We’ve already witnessed the other popular financial instruments including equities, options, futures, and currencies, succumb to the inevitable, but fixed income is still dominated by the murky business of OTC trading. There are signs, however, that even this asset class has finally reached a tipping-point, and that we are now on the verge of a new world where the buy-side’s demands for transparency will finally be realized.

To understand what this future may look like we must first understand how fixed income trading got to where it is today.

When Two Sides Collide

The fixed income trading world has always been defined by the opposing interests of the buy-side and the sell-side.

The buy-side has almost uniformly expressed dissatisfaction at the whole fixed income trading process. Complaints include a complete lack of transparency, an inability to obtain reliable price discovery and market data, the high-cost, and the general inefficiency when compared to the electronic trading of other asset classes. More recently there has been intense pressure to include fixed income in electronic multi-asset trading class strategies.

The sell-side on the other-hand has been highly motivated to keep things status quo. Over the years fixed income trading has been a cash cow business for the large Wall Street dealers. For example, fully 52% of Goldman Sachs’ $45 billion revenue in 2009 came from their fixed income trading division. The sell-side understands that moving fixed income trading away from the OTC model to more exchange-like platforms and Alternative Trading Systems (ATS’s) will almost certainly result in greatly reduced profits. The sell-side in their defense has argued that the sheer volume (3 million fixed-income securities and counting) and the inherent complexity of fixed income products does not lend itself to a more standardized and centralized market.

Innovation around the Edges

That is not to say that there has not been innovation or change. Over the years there have been some key developments Read more

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 Read more