Joe Signorelli has had a front-row seat to the evolution of markets and trading for nearly four decades, starting in 1987 as a floor trader at the Chicago Board Options Exchange and progressing through multiple leadership roles in equity, futures and derivatives electronic trading, portfolio management, and product development.
Traders Magazine caught up with Signorelli, EVP and Global Head of Quantitative Trading Solutions at Trading Technologies, to learn more about his current role and the state of play and ongoing evolution at QTS.
How would you most succinctly describe Trading Technologies’ Quantitative Trading Solutions group?
QTS provides premium services to the trading community in the form of sophisticated multi-asset class execution algorithms to help minimize trading costs, and strategy development software to streamline the process of creating low latency systematic portfolio strategies.
We also have an options product called TT Uncovered, which helps agency desks find a Delta replacement for their large buy-side clients.
You were CEO and Co-founder of RCM-X, a technology provider of algorithmic execution strategies and quantitative trading products, when TT acquired the firm in March 2022. How has TT’s QTS group evolved since then?
QTS has leveraged TT’s global data center presence to broaden our global futures coverage and proximity hosting. We have integrated START, the broker-neutral trade optimization platform that we acquired last year from Abel Noser Holdings, broadening our coverage for equity execution algorithms. We are also working closely with TT’s growing fixed income and FX business lines to extend these solutions beyond our legacy listed derivatives clients to the spot and bond trading arenas.
It’s been fantastic since we came over three years ago. Our management, including CEO Keith Todd and COO Justin Llewellyn-Jones, is super experienced and has done great in leveraging our skill sets and our algorithms, effectively putting us on the global highway that TT has created and keeps expanding.
Our product coverage is global now. It was great to work in a smaller quantitative team at RCM-X where we came up with entrepreneurial ideas and did a lot of hard work, but coming into a bigger firm that’s also in growth mode has been a beautiful fit.
Who are QTS’s clients and what are their primary pain points in trading and algos?
Our execution algorithm clients run the gamut: proprietary trading firms, banks and brokers, CTAs and hedge funds, commercial energy and agricultural companies, and traditional asset managers and owners. These customers use our technology to more effectively source liquidity from technologically sophisticated market making firms, and to benefit from our broad insights into their execution quality.
Our software solutions customers are more concentrated in the proprietary trading firm segment, where the software helps them streamline their processes and focus their R&D on alpha creation rather than infrastructure.
The software that we deploy allows groups to build their alpha trading, their portfolio trading. Our algorithms are co-located within the exchange to reduce their slippage.
Trading firms want to hide their footprint in the marketplace and they want algorithms to improve their trades and execution, so they can focus on other things. If you can’t deliver that as a trading services provider, no one is going to use you. It needs to be a cost-effective model that reduces slippage and gives trading firms multiples on the dollars they spend.
How does QTS differentiate itself in a crowded marketplace?
We differentiate through our expertise with low-latency trading technology, global co-located presence, and customer service excellence. We are one of very few independent execution algorithm providers that are not owned by a bank and not actively managed by an exchange, which lowers our conflicts of interest, and in that category we have unique scale and global presence.
Everything we do is on our C++ technology stack, whether we’re driving it through our TT infrastructure, or through our agnostic offerings through other independent software vendors – Fidessa, CQG, FlexTrade and others. That second part is a key component in that we can provide our benefits to trading firms who aren’t on TT, but maybe they will be in the future.
Another way we’re different from many pure algorithmic technology groups is our people. I ran quantitative trading at TD Bank and also Stafford Trading, and I have experience as a floor guy, an upstairs guy and a hedge fund manager. Many people on our team also came up through those sides of the business, so we have a very good idea of what our clients are looking for. Yes, we provide great technology and great algos, but we also really know where they’re coming from, and we know their pain points.
What are QTS’s main initiatives currently?
We are launching execution algo coverage for options on futures and FX, and we are evaluating new product opportunities in the fixed income space, under the leadership of Chris Heffernan, EVP Managing Director, Fixed Income at TT.
We’re also putting a lot of emphasis on the equity space. Now that TT is a non-executing broker dealer, we can participate in the fee structure and do more on the equity side. We’re blending a lot of the intelligence from the Abel Noser START division into TT Strategy Studio, our end-to-end framework for creating advanced automated strategies for institutional multi-asset trading.
Also, we have provided execution algos to Lime Trading for more than 10 years and we can expand on that long-standing partnership.
What is the future of QTS?
We’re driving ever forward with cohesive, global, multi-asset class solutions. We’re going to continue to do this while completing the asset class solutions so that we can continue servicing global trading firms for all the different assets they trade.
