Market participants feel confident in the speed of Direct Market Access (DMA) systems and have turned their gaze on improved execution and data management.
These were the two main themes to come out of Radianz’s DMA Industry Roundtable held last night in New York’s Times Square. When asked point blank “What is your primary interest in implementing a DMA strategy” 34% of the 250 audience members pointed to the improvement said strategy would have on their trade execution, compared to 31% that said such implementation varies by client, 10% that said DMA would improve trading strategies and 8% that were looking for more control.
The roundtable’s panel moderated by Radianz’s own Chris Church and made up of Jeffrey Wecker, Managing Director and Head of Electronic Client Services at Lehman Brothers, W.E. Bosarge, Jr., Chief Executive Officer at Quantlab Financial LLC, Roger Burkhardt, Chief Technology Officer at the New York Stock Exchange and Jonathan Ross, Chief Technology Officer at INET ATS agreed with the audience in why DMA strategies are so important. For NYSE’s Burkhardt, with a focus on improved execution, the exchanges benefited from improved liquidity. The circular logic was that ostensibly, this benefited all participants with their execution.
However, INET’s Ross said there is more to execution than completing a trade. “While historically DMA was all about ‘how do I get to you (the exchange) as fast as possible,'” Ross said, DMA had since evolved to also getting accurate market data. Confirming this thought was the audience, 40% of which said the key challenges to a DMA implementation was managing the processing of data, compared to 24% who answered STP. This was no surprise to Lehman’s Wecker. “Reliability will ruin someone’s day a lot faster than latency will.” For Lehman the problem is a double-edged one, as Wecker found challenges with taking in data and providing it to clients on the back end.
For clients though, Quantlab’s Bosarge, found many asking him what to do with the data once they get it; a problem that cannot be solved at a DMA roundtable.