We started Marketcetera a couple years ago on a mission to develop a fundamentally better method for writing, managing and implementing algorithmic trades for hedge fund managers and proprietary traders. Both Graham and I spent ten years managing trading platforms and strategies for Wall Street hedge funds until we couldn’t stand dealing with slow, bulky software anymore. It got so bad that our trading software was actually hindering our best traders from doing their jobs.
On Christmas Eve, BusinessWeek Online ran an article, “Bring Open Source into Hedge Funds.” Talk about hitting the nail on the head.
The article by Peter Algert, co-founder of the San Francisco-based Algert Coldiron Investors hedge fund, asks for some open-source love for hedge funds. He argues hedge funds are too focused on making money to collaborate on any solution, yet, technology is typically a hedge fund’s second largest expense, after headcount. He writes, “Our ‘secret sauce’ is our trading strategies—it’s not our systems for trading. These platforms can cost even a smaller fund like mine hundreds of thousands or even millions of dollars a year.” Continue reading
Earlier this month, Rachael King at BusinessWeek ran a story, “Cost-Conscious Companies Turn to Open-Source Software.” The story compares our current recession-driven IT budget crunch to the tech bubble burst, and examines how some large businesses have, and continue to, test out and implement various flavors of open source software to work around shrinking tech budgets.
One of the companies adopting open source is E*Trade. The article kicks off:
“In 2001 and 2002, the online stock trading company shrank its tech budget by one-third. “We had to go through and figure out every penny that we were spending…and make alternatives to reduce those costs,” says Thompson, vice-president and chief technologist of E*Trade (ETFC). So he began using software that can be downloaded at no cost via the Internet. By the end of 2002, he was saving $13 million a year thanks to use of these freely available applications known as open-source software, and the fact that he could run that software on less expensive hardware.” Continue reading
Today we are announcing the release of Marketcetera’s Automated Trading Platform version 0.9.0. Here are some highlights:
As we continue to evolve the product, we have received tremendous community feedback. To further improve our communication and coordination with our community, we are launching new community tools for documentation (Confluence), bug/issue tracking (Jira), code browsing and reviewing tool (Crucible). We would also like to give credit to Atlassian for providing us with free open source licenses for those tools.
As John Donne once, almost, famously said, “No open source project is an island, entire of itself.” We might have taken some liberties with the exact wording, but we at Marketcetera take the essential meaning to heart: our products do not exist in a vacuum, they are the building blocks of a greater whole consisting of our partners and other interacting vendors.
We’ve built Marketcetera in that spirit, to be a true open source product with a transparency and flexibility that welcomes add-ons. Front office or back, Eclipse or Java, our platform is built to seamlessly plug into the greater functionality that financial service applications can provide. Graham Miller, our CEO, went into a few of the specifics in an interview with ZDNet’s Dana Blankenhorn last April:
When The 451 Group approached Marketcetera 2 months ago to contribute to a commercial open source report, we weren’t quite expecting the end result to be titled, “Open source is not a business model.”
The analyst firm surveyed 114 open source companies, including Marketcetera, on their business strategies. They sought to answer the question that plagues every open source vendor at cocktail parties and VC pitches alike: “How DO you make money if you give your product away for free?” Continue reading
Our team just returned from Wall Street and a battlefield tour of our current market travails. What became clear to me, through our discussions with customers, prospects, analysts and press, is that the current market volatility will accelerate the industry’s adoption of open source software.
Financial institutions have a deep and abiding frustration with incumbent proprietary vendors. Hedge fund IT departments labor mightily to implement new trading strategies and add analytics so they can beat their competition. Unfortunately, proprietary software vendors have them in a stranglehold with products that inhibit them from acting quickly or making changes easily. New trading strategies are delayed because the different parts of the system don’t communicate easily with one another.
A plague of locusts, a river of blood, maybe some boils?
Hello everyone, my name is Roy Agostino and I am the newest member of the Marketcetera team. I joined just as the latest market gyrations began and I am very curious on the community’s thoughts on how we will emerge from this turbulent period. From my perspective, even as we watch the latest daily storm buffet the industry, it helps me to step back and begin thinking through how current market forces will reshape the financial services industry.
Pauline Skypala, writing in the Financial Times, muses that even the term “hedge fund” will lose meaning as they converge with the traditional asset management industry. Hedge fund managers actively manage risk (and focus on absolute return), while their more traditional counterparts focus on risk relative to a benchmark (and relative returns). Continue reading
Let’s not debate the merits of the enormous regulatory changes from the SEC today, but take it as a given that we all need to deal with it. Today’s unheralded announcement, as well as the 2 week expiration date, represent lightning-fast time frames in an industry that is typically given years to prepare for such large structural changes.
The software you use should be able to adapt – quickly. It touches every part of your trading business from regulatory (obviously), to trading strategy formulation, to risk management. When even extra-loud value investor Jim Cramer is suggesting short-term trading strategies because of these changes, you know this represents a fundamental shift.
So how are your systems faring? What would you like to see them do better? And, what would you like to be able to change right now?
It’s been an eventful week in the capital markets, as four fairly large dislocations sent traders scrambling.
I’m not going to comment on the Fannie/Freddie bailout, or on the glitch at the LSE that halted trading for much of Monday. And I’ll leave it to Paul Kedrosky at “Infectious Greed” to draw a connection between the Lehman announcement and the first test of the Large Hadron Collider.
But let’s look at the darkly comical story of the United Airlines stock plunge at 11am Monday. The catalyst was when a reporter at Income Securities Advisor re-posted a 2002 United bankruptcy filing, feeding a wire service published on thousands of Bloomberg terminals worldwide and flagged as “new” news.