Exegy, Director of Automated Trading Pat Gardner

Source: Notion | Last edited: 2023-10-31 | ID: 989eca9f-f24...

Wednesday at 1 pm: July 5, 2023, at 11 am Vancouver time meeting

Terry: Currently, we are having some questions about how to further proceed in acquiring data, especially high-quality data. If we go direct to the exchange, we have the best data, but we heard that it’s going to be very expensive. Are there different tiers of data that we can acquire for the sake of backtesting? Also, in the future, if we want to trade live, what’s the best route forward? It’s just so complicated. We heard different versions of different stories from different people. I just want to get a more or less unbiased view from you. Victor: If I could give it a little bit more color as well, we’ve been doing high-frequency trading in the cryptocurrency markets, as Terry probably mentioned, for the last three years. We’re quite comfortable with that. It’s just that we don’t come from a traditional finance background. When we come from the crypto market into the traditional finance market that we’re looking at now, it just seems incredibly complicated and obscure somehow because there’s all these different conventions and different ways of doing it. Essentially, we’re just trying to figure out what the best way is to move forward with getting data, executing trades, as well as some foreign stuff. Patrick: I can try to provide. I’m in Chicago. I’ve primarily been selling in options trading platforms for the last 15 or so years. Our company was acquired by a market data company about four years ago. I know a little bit about the market data space as well in the traditional finance. I’ll try to pass on any information I have. I might just be another piece in the bigger puzzle. As far as historical data, our company doesn’t really do much with historical data. We have some U.S. equity data that we can provide files for, but that’s just because we record it ourselves. We provide it to FINRA. That’s a packaged market data product because we already have it that we can sell. Other than that, we sell a market data recorder for people that comes alongside our real-time data software. We have a few different products. We have data as a service, basically like a managed service, where you say, I want this feed and this symbol, and we give you an API. We give it to you, typically in a data center, although we can do some AWS stuff. Then we have exchange feed handlers. Our flagship product is a hardware ticker plant, and it can be hosted as well. You get data directly from the exchanges, but you buy our hardware and technology to normalize it and then distribute it afterwards. That’s our space. In the market data, what I usually focus on is traditionally our options platform, but also our execution technologies. We have an API solution for futures trading, where we give you normalized futures exchanges, order entry API and market data API for you to then plug your own strategies into and get them directly to the exchange. It works in conjunction with the clearing entity. It’s a three-prong part of it. You have to call up an FCM, give them enough cash, and go through their know-your-customer account funding vetting process. Then we are the technology partner for the execution. That gives you data directly from the exchange through us, and it’s a managed service, typically. Of course, that’s different than what you asked about in the historical space. If you haven’t yet, you might want to look at OneTick for historical data. A friend of mine used to work there, and they’re in the space. I don’t necessarily know who else. People come to us either afterwards on the execution side. I talk to them, or they’re looking for more of the feed handler, whether it’s on software or hardware technology from us.

Victor: Awesome. I have two questions from what just came up. You mentioned the word normalized a couple of times. When I think of normalized, I think of a number between 0 and 1, statistically. I don’t know what it means in this context, necessarily.

Patrick: The idea being is we gather all exchanges. You can get market data with one API, basically. We take it, do all the processing, and put it in formatting with the feed handler. That way, you can expand and say, I want to trade on CME. I want to trade on ICE. I want to trade on this. Both for the market data and a normalized API going the other way, meaning standard order protocols that can be applied to multiple markets.

Victor: The second question is about the order protocol that you mentioned as well. Essentially, you don’t act as a broker. We would actually have to have another entity in between. We are just a technology company, so we don’t do any per trade charges or anything.

Patrick: That’s correct. We are not a broker. We provide the technology and infrastructure for order execution, but you would need to work with a separate entity, such as a clearing entity or a broker, to handle the actual trade execution and any associated fees.

Victor: I see. So, if we were to use your services for market data and order entry, we would need to establish a relationship with a clearing entity or broker separately to handle the trade execution aspect?

Patrick: Yes, exactly. We focus on providing the market data and order entry APIs, along with the necessary infrastructure. To execute trades, you would need to work with a clearing entity or broker who can facilitate the trade execution and handle the necessary account funding and compliance processes.

Victor: Understood. That clarifies the process. Now, regarding historical data, you mentioned that your company doesn’t deal extensively with historical data. Are there any recommendations or other companies you’re aware of that specialize in providing historical data for backtesting purposes?

Patrick: While my company doesn’t focus on historical data, I can suggest looking into OneTick. They specialize in historical data and have been in the space for some time. They might be able to provide the data you need for backtesting your strategies.

Victor: Thank you for the suggestion. We’ll definitely explore OneTick for our historical data requirements. In terms of your market data services, do you offer different tiers of data packages? We’re particularly interested in high-quality data for backtesting purposes.

Patrick: Our market data offerings are primarily focused on real-time data and data delivery infrastructure. We do have different products and services, such as data as a service, where you can specify the feeds and symbols you require and we provide an API for accessing that data. However, for specific details and pricing regarding different tiers of data packages, I would recommend reaching out to our sales team. They will be able to provide you with more information tailored to your specific needs.

Victor: I appreciate the clarification. We’ll definitely get in touch with your sales team to discuss the data packages that would best suit our requirements. Thank you for your insights and assistance in navigating the complexities of the traditional finance market.

Patrick: You’re welcome! I’m glad I could provide some insights. Feel free to reach out if you have any further questions or need any additional assistance. We’re here to help you navigate the market data landscape. Good luck with your endeavors in the traditional finance market!

Victor: Thank you, Patrick. We appreciate your support. Have a great day!

Patrick: You too! Take care. Goodbye!

Hi Terry,

Great to hear that things are coming along. I’d be happy to share whatever knowledge I have to try and help out. How about next Wednesday at 10 am or 1 pm Chicago time, or next Friday at 9 am?

Cheers,

Pat

Patrick Gardner

Head of Trading Sales

M. +1 312 662 8975

pgardner@exegy.com

Video

Exegy’s Background: Patrick mentions that Exegy is a long-established company that has acquired numerous other businesses in recent years. These acquisitions have helped Exegy expand its range of different technologies focused primarily on market data and execution.
Exegy’s Position in the Crypto Space: Despite their presence in the market data industry, Patrick acknowledges that Exegy is not very strong in the crypto space. They don’t possess market data, feed handler, or ticker plant type technologies for the crypto realm like they do for traditional exchanges. This is a limitation that they recognize and could potentially consider challenging in the future.
Mention of Proprietary Trading Platform: Patrick introduces Exegy’s options platform called Metro which they use in the proprietary trading space for crypto.
Potential for Scaling: Patrick indicates that starting with one major exchange would be a practical first step, given the possibility to scale out from there as required. The approach to scaling out is purposefully open-ended and flexible.
Technical Support: He mentions that Exegy can provide assistance in setting up servers for their customer’s execution logic, should this be required. He is clear that this would only cover the technological aspects and not the financial exchange membership.
Exchange Memberships: Patrick clarifies that the process of joining an exchange would be facilitated through a clearing broker, who would arrange ‘sponsored access’ to the exchange. This means that customers wouldn’t need to directly join the exchange, which would simplify the process.
Infrastructure: The aim is for Exegy to manage the underlying technology and infrastructure. This would include the likes of handling all the connections to exchanges and maintaining them. This is presented as a significant convenience for customers, who could then focus on deployment of their strategies rather than worrying about the technicalities.
Anecdote About Deutsche Bank: In order to illustrate his point, Patrick provides an example of Deutsche Bank, which uses their technology. He shares how the technology was initially developed within the bank and later became an independent entity.
Initiation and Scaling: Patrick advises clients to begin with a single major exchange and gradually expand from there. This gradual implementation offers clients not only the flexibility to test and refine their strategies, but also greater control over their expansion.
Technical Support and Management: Exegy also offers services for posting servers for their client’s execution logic. Clients don’t have to purchase a seat at the exchange, as Exegy handles the technological aspects. This service reduces technical pressures on clients, allowing their focus to remain on trading.
Exchange Membership: Patrick clarifies that the responsibility of obtaining sponsored access to an exchange would rest with a clearing broker. This broker would liaise with exchanges such as CME or ICE to secure trading licenses.
Access to Global Exchanges: Patrick talks about the value Exegy presents to large brokers wanting access to futures exchanges globally. Exegy’s infrastructure can help them effectively distribute this service to their customers.
Flexible Pricing: Exegy offers flexible pricing based on their role as a technology and infrastructure provider. This could potentially mean cost savings for clients. Patrick reassures his customers that they will have his support and considers the described offerings as potential opportunities for collaboration. His closing remarks suggest an optimistic attitude and a willingness to further engage with his customers. Overall, his comments are geared toward illustrating how Exegy can serve as a beneficial partner, offering seamless technological assistance and infrastructure support, allowing clients to focus on their trading strategies.

Meeting Summary Timestamp by Merlin.AI

Detailed Summary for Exegy, Director of Automated Trading, Pat Gardner 2022 12 07 12 01 05 by Merlin

03:05 The company is primarily a market data company and weak in the crypto space, but has an options platform called Metro for market making and volatility curves.

The company has acquired several other companies in recent years and has various technologies around market data and execution.
The company does not have market data, feed handler, ticker plant type technologies for the crypto space like it does for traditional exchanges.
The company is a service for banks and institutions and market data is its business.
The company’s proprietary trading space for crypto is its options platform called Metro, which is very options specific and was built by the guys who built the options technology at Chicago Trading Company.
The company is getting into the crypto space heavily with Darabit and seeing a lot of demand.
The company does not have a particular product for futures, but does have a DMA platform. 05:39 DMA platform provides easy access to traditional futures market
DMA platform is a data, connectivity, and order API with pre-trade risk API
DMA platform provides direct access to exchanges and is specialized in futures market 08:08 Our DMA platform serves large brokers with global reach and infrastructure.
Developers are more familiar with JavaScript-based and socket-based APIs.
Interactive Brokers is difficult to work with and has limited global reach. 10:17 DMA platform for traders with custom logic
Platform allows traders to implement their own logic quickly and easily
Infrastructure supports co-located software speed for fast execution 12:44 Market making on Binance for over 3 years
Founders and CEO have been in crypto for over 5-6 years
Other exchanges offer incentives but come with risk 14:48 Starting a clearing account and trading futures is not a big lift
Clearing brokers can provide rates and risk information
Pricing for DMA platform is straightforward at $3,500 per market per month 17:04 Different ways to set up COLO for key strategies
COLO or millisecond options available
Centralized place for enterprise