More Trading Firms Using a “Trade Smarter, Not Harder” Strategy

There are lots of ways to run a trading firm.

Some firms use a strategy centered around high frequency or algorithmic trading, which are similar in that having the best technology and writing the fastest trading applications is essential.

At the other end of the spectrum, some firms employ only human traders, using a traditional buy-and-hold strategy, expecting to hold the security for months or even years before moving it.

But in between these two ends of the spectrum, there exists a hybrid that uses electronic trading with a bit of buy-and-hold added in. Some call this blend “trade smarter, not harder”.

Instead of competing with other traders to get the absolute lowest price, this strategy prioritizes on making better decisions by doing “pre-trade analytics” on historical and financial data.

Often this strategy is employed for the more complicated instruments like derivatives, which are based on a bundle of underlying securities and are therefore more complicated to evaluate. By analyzing data to trade “smarter”, one can often overcome the costs of not getting the absolute lowest price with high frequency or algorithmic trading.

While businesses that choose “trade smarter, not harder” may think they have little need for Informatica Ultra Messaging, the leading peer-to-peer messaging middleware, it is important to remember that Ultra Messaging also provides a wide variety of direct business benefits for any type of application that relies on messaging, including efficiency, scalability, agility and reliability. And in many cases, Ultra Messaging runs on less hardware than competing solutions that rely on messaging brokers. Less hardware means a smaller IT footprint, lower energy costs, and lower IT maintenance budgets.

Many of our current low-latency customers value one or more of these benefits just as highly as low latency, since it is an IT truism that performance is great, but doesn’t matter much if the application is down all the time, or if deployment and scalability are a problem, or if day-to-day recurring costs are rising all the time.

For more, see our video Ultra Messaging Reliability and Availability, our 2011 Efficiency blog series (#1, #2, #3) on our Perspectives blog, or see whitepaper Modern Messaging Middleware for Big Data in Motion, or view webinar replay Delivering Real-Time Analytics for Proactive Capital Markets Risk Management.

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