Apps – short for software applications, of course, but also conveniently one syllable of the word “apple” – are a part of just about everyone’s life these days, and available from a variety of different places beyond just the Apple App Store.
They are also being utilized in the trading space, although so far only a couple of companies are offering them. One is OptionsCity, which on Wednesday launched the newest version of its Metro NOW platform, which among other things offers customizable widgets (a simple type of app) that customers can design themselves. Metro Now also has an app store called CityStore from which they can download off-the-shelf widgets.
According to Hazem Dawani, OptionsCity’s CEO, using these widgets “doesn’t require the customer to reinvent the wheel and rebuild all the core system functionality. Customers can quickly build the widgets that communicate with the market and analyze information, and they can build them within days rather than months or years.”
He said sophisticated users such as market makers have been building their own widgets from scratch, but now they are abandoning that model and looking for a hybrid way to build only the components they care about.
“These days, the fees to run your own trading operations are so enormous that it’s very difficult for these firms to continue having large overhead and building these things themselves,” Dawani said. “Most of it is not unique and can be built by someone else.”
Metro Now lets those firms purchase only the widgets that apply to their particular trading operations, and they can build their own on top of the widgets available in the store, he said.
One of the firms that is designing a widget for Metro Now’s app store is OTC Global Holdings, primarily an energy broker. The company is designing a widget that will communicate with its back end systems to pull in all the orders, whether by phone or IM, and then transmit the orders electronically to the widget, according to Suresh Dongre, chief technology officer at OTCGH. So a user of Metro Now will be able to download the widget and then bring up OTC Global Holdings’ liquidity pool, which includes the liquidity on both ICE and Globex.
Another major ISV getting into the application space is Orc Group. Orc’s acquisition of Tbricks brought it the ability to offer apps to its customers.
Both ISVs offer customizable widgets, although Orc does not offer them through an app store.
Orc’s chief strategy officer Jonas Hansbo said that when he was at Tbricks (he has worked at both Tbricks and Orc) the company “kind of invented the app trading platform in 2006.” The company’s customers were always requesting new features, new bells and whistles, and new trading functionality driven by innovative ideas and market changes, he said. They were also interested in risk management applications.
“If you don’t write your software the right way, you have to hard-code it for every single thing, and it becomes harder and harder to deliver the new functionality,” Hansbo said. “It becomes like a house you build more and more and it just falls apart.”
The company designed the software so that it would offer a platform on top of which customers could build applications – and not just black box apps, but apps with a user interface.
Hansbo said the app platform was analogous with an iPhone, “where you have a piece of hardware, and then you can install tons of apps with things you are interested in doing with the hardware.”
Like an iPhone, a trading platform has to talk to the markets, he said.
“We had a platform that does market connectivity, does some other heavy lifting that is important for trading applications, and can aggregate trades and inventory and positions and do risk analysis, and then we would have an API, which is what smartphones have, that allows you to download apps,” Hansbo added.
Orc provides apps that they build with source code so that customers can understand how Orc has implemented the Tbricks functionality, and then if they want to, customers can take that source code and add their own features to it.
“It’s completely open in that sense,” he said.
One example of an app Orc provides is one that allows customers to manage volatility for options pricing, he said.
“They can visualize the markets and they can fit their own curve to the market curve efficiently and manipulate the curve in different ways. It is a crucial tool for all traders,” he said.
As for me, I am still using a flip-phone, so an app is still an abstract, if intriguing, thing.