Multi-Asset Trading in a Cloud-Native Era

Jun 04, 2020

Author: Joe Pocock

There are an increasing number of trading platforms on the market, targeting the ‘anyone-can-trade’ audience. Mobile apps such as Trading 212 (which covers standard share and fractional share trading) and Plus500 encourage anyone to invest as little money as they like on global marketplaces, something that’s not always been accessible to every ‘man on the street’.

As technology has evolved, so have the assets we trade with. Business and individuals are so finely in-tune with where they can place their money, if your portfolio and strategy is vast and split across multiple assets, you’ll likely want a trading platform which can support that.

This is the solution presented by THETA Trading Technologies, founded by Abdullah Hiyatt and Paul Wallace, who each have over 20 years’ experience of trading solutions; building and designing e-trading platforms and infrastructure solutions. Their view is that the financial industry is fragmented, fitting nicely into individual silos (be it an asset class or product type), and the reason there’s yet to be a drastic modernisation of the industry isn’t technical, it’s emotional, held back by the creators of services and products, or the banks and brokers using them. Over the years these have not only become a crucial appendix to their work, the users have also taken to hoarding their knowledge in mass databases, struggling to see an alternative way of working.

With the industry constantly pushing forward, and competition and margins have shrunk, companies are looking for economy of scale in their technology and products. THETA’s platform, Apollo, is positioned to change the game.

Peter Meddemmen, Chief Technology Officer at THETA, explained their strategic and technical approach to transforming e-trading.

“I felt a lot frustration as an architect, facing regulatory challenges and cost cutting exercises when trying to bring these independent silos together, which proved difficult, usually resulting in building layers upon layers of services which can’t be fixed when something goes wrong. I’ve also spent a lot of time building core infrastructure: datacentres, servers, switches, and routers. The modern approach with cloud computing is to normalise many of these layers, break down differences in format structures and protocols, and create a mediation later, which feeds lots of inputs and output them in the same way.”

Cloud services can’t be avoided in a modern infrastructure solution, benefitting both technical and business outcomes. Once you’re paying for the service, you can scale up and down the amount of resources as you choose, with complete freedom.

This doesn’t mean building a new trading platform is as simple as leveraging cloud, Azure in THETA’s case. The team faced the challenge of how people adopt digital services, with one hurdle being their preconceptions of data-handling, where people are unsure about who owns what data, and what is truly visible in a SaaS solution.

This dictated how the platform was built.

“We no longer approach an architectural project from bottom to top,” Peter explains, “beginning with the data structure, establishing the technology stack, creating a grand idea of the finished product; adding functionality and workflow around that, and finally building the UI. When adopting cloud technologies, you work from the user experience backwards. It’s a given that cloud infrastructure is normalised in a mediation, service bus, or container level, where data is highly malleable. Apollo has been approached from the best user interface and experience first, then working backwards through web servers, API’s, into the message bus, then input/output from the service layer”

Building a platform from the ground up completely changes the design and support elements. Peter described situations where organisations have been supporting many different versions of one platform. Overtime new features are been added for some but not all, making it near impossible to move all users over to one unified product. “One person may be on version nine whilst another is still on version one”, he joked with an air of truth, “to avoid this, we’ve adopted a continuous deployment mentality, always deploying new code into the system under a strict policy. The system automatically performs logic and policy checks on all code, allowing any programmer to commit code to change parts of the product, and the system reacts accordingly. This way, developers can commit code at any time... no longer do we need to wait three or six months, and our system won’t break as the policy upholds.”

The foundations behind the platform mirror typical e-commerce shopping habits - we like to access thousands of marketplaces to review and get the best price on any product, and have it delivered the next day. THETA wanted to ensure the same for their customers, who at the click of a button have all the necessary information validated (e.g. whether you and the third party have the money to trade), is it regulatory permissible, and be able to get to the market without obstruction.

There are other cloud-based solutions and SaaS vehicles which access multiple marketplaces, but these are typically concentrated on a specific asset, product, market, or region. Apollo is different, as it will provide access to any pool of liquidity, any venue, and for any customer. “It is an aggregated, total view of the market”, says Peter.

“Our main expectations are on the buy-side within hedge funds, for fund and wealth managers. Regulation was imposed on the big banks and brokers on the sell-side first, so they were historically quick to react. It makes sense then, for us to offer a product to an audience who aren’t overly technically adverse – many are not committed to long-term contracts with vendors, and some have simplistic technology. We’re also building in the asset classes in a strict timeline to benefit wealth managers. Cash products first, with FX towards the end of the year, followed by OTC, complicated structures, and synthetic products. In three years the platform will support anything you can trade.”

Cloud native solutions are certainly the new normal, it’s the infrastructure setup of choice for many young firms, with the big three (AWS, GCP, and Azure) dominating the market. For a company like THETA, it’s liberating from both a technical and strategic aspect, right from conception through to the continuous deployment stages. It’s also ushered in a new age for the commercial user, which THETA will take advantage of, having built a platform which lends itself to the idea that anyone can trade, as well as being an essential tool for wealth managers. In an industry which moves so fast, a cloud-native, multi asset trading platform is an ideal solution to a problem which, if not revolutionised soon, could be left in the dark.

THETA have developed specific features for a number of pilot clients of theirs, aiming to go live sometime in Q3/Q4. You can learn more about the Apollo platform and the team behind it here.