The last 9 months have been unlike anyone has seen in recent years. Whilst the financial sector has so far escaped much of the carnage, other sectors have suffered, and there is still a great deal of pressure to reduce costs to prepare for the unknowns yet to come. Having the right tools to trade is critically important, yet care must be taken that they are delivering the right value.
One cost that often stands out is Market Data. There is a perception that it is simply unavoidable to trade without a live feed of market data, however this comes at an annual cost of approximately $25,000 per user.
Non-trading employees often need a view of trading activity which typically incurs the additional full cost of not only a license but the associated real-time market data regardless of their need. Holiday cover can prove expensive with the need to provide additional licenses for the covering trader or go through the pain and operational risk of transferring account ownership every time. Costs related to market data add up for mandatory administrative tasks undertaken by ops personnel.
A fund we spoke to were finding that the cost to source market data was a genuine barrier to get their business up and running. They had multiple traders, but also several personnel who needed to monitor trade flow. None of them needed real-time market data, but all the solutions they looked at were going to charge many thousands of dollars per month because they always included them.
What if your main priority was to route orders electronically and get real-time feedback on the trading progress? What if you didn’t need to track against real-time market data benchmarks? What if monitoring trade flow by non-traders is an important operational mandate for your fund? Many of the firms we have worked with have saved significant amounts on their fixed costs by only choosing to use market data where it is required.
FlexNOW, Flextrade’s off-the-shelf, cloud-based EMS, gives you the ability to forego an expensive market data source and simply route your orders using a local security master. This means you still have full access to the 300+ brokers and 1000’s of algos on our Flexlink network but without any high fixed costs. This is a very attractive feature to newer firms, as they can reduce start-up costs and therefore risk in the early stages, Furthermore, FlexNOW also enables a great source of savings for more established firms with compliance and administration teams.
We are more than happy to set up a call and give you more information on how to reduce your market data costs.