Financial Market Data Web Services – Xignite Blog

Each of the three largest US exchanges, NASDAQ, NYSE and CME Group has recently announced its cloud strategy, but exchanges and financial markets as a group have been slow to get on the cloud bandwagon. Too slow given the potential benefits to their customers and their own needs to increase revenue, market transparency and competitive advantage. That according to a recent white paper released by The Melbourne Group entitled The Winds of Change in Market Data : Winning Cloud Strategies for Exchanges and Trading Venues.

The new NYSE Technologies’ Capital Markets Community Platform is a significant and bold IaaS play that aspires to become the Amazon Web Services for financial markets by leveraging the tight community and unique technology needs within financial services that so often prevent generic offerings like AWS and Azure from competing on Wall Street. NASDAQ and CME Group on the other hand have placed their initial cloud bets one level up on the cloud stack with data-as-a-service offerings, NASDAQ Data-on-Demand and CME Data Cloud respectively.

Now that the big three have all made claims to the cloud, it seems like only a matter of time before each of the remaining hundreds of stock exchanges and trading venues around the world follows suit with its own cloud strategy. Right? The answer is not so clear, because Read more

Algorithmic trading firms were put on notice last Monday when Commissioner Bart Chilton of the Commodity Futures Trading Commission (CFTC) said that high frequency trading (HFT) and algorithmic trading firms should be made legally responsible for maintaining a minimum set of testing and monitoring standards to prevent future flash crashes.

The possibility that algorithmic trading firms may need to support new regulatory requirements highlights the rapidly growing importance of the market data cloud and new cloud services like NASDAQ Data-On-Demand for back testing purposes.

In a bid to resuscitate the heroes of 1980’s sitcoms, Mr. Chilton declared, “I want to be like MacGyver. Remember, he was always trying to prevent crime before it happened.” So if you’re a criminally culpable algorithmic trading firm, you’d best beware—especially if Mr. Chilton gets his hands on a paper clip and a stick of chewing gum. Household items aside, Mr. Chilton also plans to rely on tools such as a “kind of Good Housekeeping Seal of Approval.” He’d like algorithmic trading systems to be tested by either exchanges or regulators before going live. And after going live, he’d like algorithmic trading systems to be monitored on an on-going basis.

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This week NASDAQ was the first major exchange to launch an on-demand service offering Level 1 historical stock tick data.  As the first truly on-demand service for historical stock tick data, NASDAQ Data-On-Demand is leading a revolution that’s democratizing access to market data and reducing costs by orders of magnitude.

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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.

One of the great things about being a Silicon Valley startup in the financial services market is that there is always a good reason to visit the Big Apple. It’s even more fun when we are launching a new service like Nasdaq Last Sale and we get to do cool stuff like ring the opening bell!

Xignite outside on the Nasdag big screen