Spread betting pioneer IG Index, has implemented CSK Pricer, a pricing system supplied by CSK Software AG (CSK).
As part of a broader project to change the way in which IG Index makes its prices and markets and so expand its spread betting capability via the web, CSK Pricer is being used to enable real time calculation and distribution of prices to the web and to the company’s trading floor and back office functions.
“Previously, prices were calculated using XL spreadsheets and were controlled by the trading floor,” says Giles Wilkes, director of trading at IG Index. “By automating this process, our goal was to take dealers out of the process, freeing up time for them to manage only those deals which required expert judgment and to develop new business. We selected CSK Pricer because it was based on our preferred Solaris platform, its data vendor independence enabled us to hook easily into data feeds from Reuters, Standard & Poors and other data providers. It also has an strong track record as a highly robust and scalable real time pricing creation and distribution tool.”
CSK’s Business Development manager, Ken Cordery, points to CSK’s extensive experience of working with other forms of derivative in the German market, as “establishing a proven methodology within Pricer for creating instruments and plugging them into clients’ systems to enable real time pricing.
“In the case of IG Index,” he adds, “CSK Pricer was able to take a number of internal and external feeds and create a set of standardised business rules to run the company’s rates management, enabling the company to validate, deliver and trade prices automatically in real time.”
IG Index has been able to increase the volume of trades ten-fold compared to what was possible prior to the changes. The change, says Wilkes, is “worth tens of thousands of thousands of pounds each day to us.”
“At the same time, its outstanding ability to provide consistent pricing information in real time has significantly increased both customer service levels and confidence,” he believes. “Dealers and other staff can also maker better decisions faster, reducing our market exposure and improving profitability.”
Founded in 1974 by spread betting pioneer, Stuart Wheeler, IG Index has grown from its origins as a means of speculating on the price of gold to become a multi-million pound business taking bets on a wide range of financial activities, from stocks, currencies and interest rates to house prices and sports betting. As a flexible and tax- free alternative it has proved much more resilient than conventional stock market trading.
Wilkes says he was impressed with the quality of technical support provided by CSK throughout the project. “CSK Pricer is now one of the most important systems we have, as we seek to take advantage of ever-wider market opportunities,” he says. “In short, it is impossible to over-emphasise the value of having such a robust and reliable pricing system at the core of everything that we do.”