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Managing Costs by Stratifying Services

To address and help contain rising market data costs, firms are employing several strategies to make their dollars stretch further. One tactic is to stratify the firm’s market data user base and provide each group with only the data that it needs.

There is a wide and growing spectrum of market data services available to firms that address varying needs across the enterprise, from ultra-low latency direct exchange feeds used to power electronic trading applications, to end-of-day data used for back office portfolio pricing. The choices include:

  • Ultra-low latency direct exchange feeds. The costs of implementing sub-millisecond direct feeds can be significantly reduced by using the vendor hosted model, which reduces communications, ticker plant maintenance and ticker plant capacity management costs for clients, among other expenses.
  • Deployed low-latency consolidated feed. Technological advances in areas such as data compression and multi-core processing help keep communications and processing costs down, and allow firms to use relatively compact and low-cost client-site commodity market data servers to help manage costs. In addition Interactive Data’s PlusFeed has been measured by the independent Securities Technology Analysis Center (STAC) as delivering end-to-end median latency of 20 milliseconds.
  • Hosted consolidated feed. Delivers compact, bandwidth-efficient, streaming tick-by-tick data for a subset of the consolidated feed data via leased line or secure Internet VPN. With the market data infrastructure hosted by the vendor, and communications costs reduced by user-defined portfolios or watchlists, hosted datafeeds offer a significant opportunity for cost savings for many firms.
  • Co-location service. Enables firms to co-locate applications alongside a low-latency consolidated global datafeed at a number of hosting centers in order to reduce latency and save on communications fees.
  • Mitigated feeds. For clients who do not need every tick of data, intelligently mitigated feeds are a smart way to receive essential data without “all the noise,” bandwidth and processing costs that full-tick feeds require. Examples include a mitigated options datafeed that is designed to help reduce bandwidth by over 90 percent compared to the full OPRA feed, or a mitigated equities feed of NYSE data.
  • XML data delivery via the Internet. For applications requiring a few hundred requests per second or less, this can be an economical option because it does not require dedicated equipment or circuits and can be integrated quickly.
  • Intra-day snapshot data. A flexible portfolio administration tool that can deliver snapshot data every five minutes when streaming real-time data is not a requirement.
  • End-of-day data. A data service with a communications interface linking an extensive collection of data to PC and workstation software.

Interactive Data delivers the full range of market data services and has designed them to help reduce firms’ total cost of data usage.  The introduction of new hosted market data services, as well as more efficient bandwidth use with a focus on high-performance market data servers and mitigated datafeeds, represent major steps in helping clients to address rising costs.

With its market data offerings, Interactive Data’s goal is to offer real-time solutions that are designed to address client requirements and at the same time lessen the impact of enormous increases in market data volume and reduce the complexity of implementation to help keep the total cost of ownership down.