A new FIX protocol promises to accelerate the algo-implementation process.
This would let broker algo developers deliver their new or modified algorithms to clients faster. And it would also save EMS providers costs on weeks of programming work to ready their systems for each algorithm change or addition.
FIX Protocol Limited recently updated a new standard, called Algorithmic Trading Definition Language-or ATDL. ATDL is built atop the industry standard FIX protocol. The ATDL protocol would make it faster for brokers to add or change algorithms’ coding and would require far less programming on the EMS vendor side, according to Ary Khatchikian, president and chief technology officer at the EMS provider, Portware.
Townsend Analytics, makers of the EMS RealTick, is high on ATDL’s benefits. “It helps me to get my broker-dealer partners’ content in the hands of their traders so efficiently,” said Stuart Breslow, Townsend’s chief executive. “It pulls me almost entirely out of the process, and puts the process almost entirely in [the broker-dealer’s] hands.”
With ATDL, when a broker wants to tweak an existing algorithm he need only change the text in the algo’s text file, Breslow said. Doing so lets the broker add strategies, change parameters or alter one parameter’s impact upon another, he added.
“It’s all being done by the broker once,” Breslow said. “And then they can deploy it to all the different technology providers. The [brokers] that have embraced ATDL no longer have to wait for any of the ATDL-based technology providers to change anything.”
Townsend wants to be among the first firms to enable an EMS to support ATDL. Townsend expects to offer its first ATDL-ready version of its RealTick EMS next month.
Breslow estimates that it will save several man-weeks of worth of work, on average, on each broker’s strategy for each EMS-factoring in the required analysis, development, testing and deployment process.
For its part, Portware already supports ATDL, Khatchikian said. “We’ve decided to support it for the reason that we’re willing to take an existing broker’s ATDL and, if it’s not up to snuff, fill in all the holes,” he said. “There are brokers that are currently shipping us ATDL that we are using and taking in and using it as a way to create our broker algorithms.”
It will take some time before the industry adopts ATDL as a standard and the EMS vendors, brokers and institutions see its true benefits, Khatchikian said. For one, everyone must commit to it.
“The EMSs won’t commit to supporting ATDL unless the brokers commit to providing ATDL,” he said. “It’s almost a chicken-and-egg-thing.”
ITG, an agency brokerage which offers algorithms and an EMS, said it is open to supporting ATDL. Stephen Alepa, a managing director who leads ITG’s financial network business, ITG Net, said the firm is supportive of “any protocol advances that will assist in the timely and effective distribution of our products on our clients’ desktops.”
Algo specialists at UBS say they like the idea of a common industry protocol. And the firm actively supports anything that delivers algos to customers faster, said Jatin Suryawanshi, UBS’s head of algorithmic trading. Accordingly, it was one of the early participants in the FIX ATDL project.
“There are a handful of platforms using ATDL and XML now,” Suryawanshi said, “so we currently use this common protocol to deploy new algorithms with them.”
