Connecting to the back-end of a prop-firm

[ofthomas]

the only ones that might fit your bill are funds that are already in that space... so yes, partnering might be the way to exploit your edge... i know some investment banks will let you co-lo next to their infra at NY4, NJ2, etc... but you cant be a two legged individual...

i dont know what you are doing now, but if I was you I would focus first on reducing my latency to current prime..

Quote from clearinghouse:

My pockets aren't that deep, but I have an edge that works on my current platform. However, the faster moving the stock is, the less effective my edge is. So I have something that pays the bills, but I'm trying to grow out of my limited space.

I've spoken to a lot of prop firms and have worked with a few in the past, but the problem is that from what I can tell, not very many firms "do it right." There are always implementation quirks in the technology that make it difficult to move an edge into their space. If it isn't the technology, then the firm has problems with their cost structure because someone there isn't already doing obscene volume.

So, I was kind of hoping to incrementally push forward, adding one multicast channel at a time, getting execution latency down incrementally, expanding to new symbols, and slowly stepping it up.

It may not be feasible, since margins are so low compared to when the current crop of top tier firms started their trading. I may need to partner with someone eventually.

 

[clearinghouse]

Quote from Random.Capital:

What specifically do you want to connect to? Literally directly to the exchanges? Or to your bank's SOR? If directly to the exchange, to how many of them? Do you want to drop into one major datacenter (eg NY4) and cross-connect to the others, or do you really feel you need to be co-located in each datacenter? Etc etc etc...

In my experience this is one place where sorting out your specific needs ahead of time really really pays off.

And be careful, there is a LOT of crap technology being pedalled out there.

I want the most optimal path for tick -> process tick -> spit order out, one exchange at a time. Some exchanges are less important than others and some latency is OK on some paths, but every colocated system needs visibility for the rest of the market -- even if the view of the rest of the market has some high levels of latency.

So for example, say I wanted to be a fast gun at BATS -- I'd want a very fast setup to take a tick from BATS, spit an order back to BATS (or cancel) -- but, that box at BATS can take a "slow" feed from other exchanges and have a consolidated feed input from other until I'm able to plug in something better. (So I'd be fine with microsecond latency on one exchange, but outrageous multi-millisecond latencies seeing other exchanges.)

My current prop firm gave me a good fee structure and good connectivity. What they didn't give me was good technology. Their order placement server is several milliseconds away from the most optimal quote servers (closest to exchange.) I've tried to get them to make some structural changes, but they have other technical problems they're trying to address that don't align with my interests.

So I have two choices: Find new edges that don't need speed and work around my prop firm, or, alternatively, look for ways to leverage my firm's existing clearing/exchange relationships, but somehow piece-meal the technology into place to get speed -- so I can improve my current edge.

 

[C99]

Some hosted, broker-neutral options here:

http://www.rtsgroup.net/trading/rtd-tango

and

http://www.ezxinc.com/asp.html
http://www.ezxinc.com/ezoms.html

I'm not on either right now so working from memory here but I believe both were in the TT / bloomie price range. RTS if I recall would have had more access than I was comfortable with, the second company EZX was good peeps who knew their shit and were super willing to help. Told me they could walk me right through the FIX cert process for multiple brokers, I had to go a slightly diff direction for unrelated reason but they would still be on my short list.