London-based trade analytics provider OTAS Technologies will integrate real-time trade and market analytics into trading technology vendor Portware’s Enterprise execution management system (EMS), to support the real-time trading decisions of its trader clients.
The two vendors held talks over the summer before recently signing an official agreement.Portware is currently integrating OTAS Technologies‘ analytics into its workflow, and will beta test the offering with customers before a full launch later this quarter.
Under the deal, OTAS will integrate two of its core analytics offerings into Portware’s EMS. The first is its microstructure analytics application, which provides analysis of real-time microstructure events and alerts traders to usual movements in volume, spread and price of equities. The application leverages real-time market data sourced by OTAS directly from exchanges, as well as a range of quantitative models to analyze previous behavior of stocks.
Once the microstructure analytics application is integrated in Portware’s Enterprise environment, the vendor’s asset management clients will be able to use the application to monitor the stocks that they are interested in trading or have traded in the past. Leveraging historical data, OTAS has calculated its own model for each stock to determine movements that constitute “usual” behavior.
The second piece of the deal is OTAS’ summary application, which includes information relevant to the equities markets, such as options and credit default swap data, insider transaction, technical data, news flows, events and dividend yields. Traders using the application can query an individual stock, and have the application carry out analysis and provide them with a sentence or paragraph in English describing the conditions. OTAS uses “best-of-breed” providers for each dataset, but does not expose the raw data to traders.
“We are very much not interested in regurgitating data. Rather, we want to provide the same analysis to traders that they would get after many hours of work,” says OTAS chief executive Tom Doris. “We have feed handlers that understand how to analyze information for each dataset as analyzing insider transactions is different from analyzing sentiment in the options market.”
Rather than providing the analytics as a standalone product, Portware is seeking to implement a deeper integration to provide customers with “seamless” experience, Doris says. “Portware is managing the workflow integration, but is not building an app store. We are currently working with them to explore ways to deliver a deeper integration and more detailed analytics into the EMS front end,” he adds.
Doris says there has been a major change in the industry over the past 12 months, as trading platforms have recognized the need to provide specialized analytics in the trader workflow. However, he adds the advantage of partnering with a third-party provider like OTAS, rather than building analytics in-house means that firms like Portware can focus on their core business. “It’s not that they wouldn’t be able to do it in-house, but that it would shift their cultural focus. They are an EMS provider, and they need to focus on EMS regulations, the constantly changing landscape of connectivity, and algorithmic trading issues.”
OTAS currently provides analytics for equities instruments, exchange-traded funds and futures, but may look to expand its coverage in 2016 to include other assets traded by Portware’s customers, such as fixed income.