Trader voice revolution

Gareth Malone and Duraid Haddad, Founders of LINX Networks spoke to Best Execution about a revolution that’s happening on trading desks across London.

You’re a young company in a crowded market; what are you offering and what led you to believe this was a good business opportunity?

Despite being a young company we have clocked up quite a lot of experience in the City and one of the frequent complaints we heard from a number of major banks and trading floors about their dealer boards was poor service and a lack of flexibility. Suppliers didn’t seem to distinguish between regular telephone-users and traders, and while trading requirements might change by the day – or even sometimes by the hour – raising a support ticket for a traditional dealer board might take days (and come with a hefty support charge). But time has moved on and so has the technology, and this was the gap in the market that we were aiming to plug.

The most exciting development for us though, is the growing interest from trading floors in soft turret solutions and cloud offerings. They are increasingly concerned about mobility, cost reduction and being greener. From a bank’s IT perspective they can see the possibility of virtualising their trading floors and taking ownership of a solution which the old traditional dealer boards just do not allow you to do. This, we think, will be a game changer.

You mention soft turrets; what are they and what advantage do they bring to the trading desk?

At its most simple, it’s a trading turret without the hardware. It’s an interface that can be used on any PC, laptop or tablet (not just PC) and handle up to 30 private wires simultaneously, just like a standard hardware based dealer board. Its key advantages are flexibility and cost. In particular we are finding that banks and trading floors are showing a big interest in soft turret solutions where traders need the full function of a dealer board but on a tablet or laptop. This also plays out well for disaster recovery scenarios and drives costs down considerably.

The advantages of soft turrets are huge and we are seeing more floors move away from the big hardware and their big support costs to a more cost-effective, adaptable and also greener solution. Even with trading floors that need to stay on hardware turrets for compliance reasons we are seeing the adoption of soft turret solutions for disaster recovery scenarios.

The double whammy of keener competition and regulatory reform are heaping pressure on the trading community. How can LINX Networks help?

LINX Networks are not the only player in this market, and therefore partnerships are key to giving us competitive advantage and delivering the same to our clients. We are the only UK Gold Partner of IP Trade, a company that has grown in under ten years to be the number one supplier of IP PBX Turrets. This is no mean feat when you consider the size and historical dominance of the two main competitors in the market (IPC and BT). In comparison we offer a significant saving in total cost of ownership because IP Trade have not tried to re-invent the wheel, but in fact leverage the end customer’s existing telephone system (PBX) to provide a lower cost back end solution. All of the IP Trade dealer boards are compliance compatible and fully meet FCA regulation requirements.

We also implement a training programme for any bank or hedge fund that we maintain, so the institution’s in-house IT team can have full ownership of their trading floor, allowing them to handle their own first and second line support as they wish.

With regard to soft turrets specifically we are currently working with the IP Trade T3 Flex soft turret system, but we’re very excited about the new T4 system due out later this year (see photo*).

Trading desks come in all shapes and sizes, buyside, sellside; retail, institutional; bulge-bracket, boutique hedge-fund; who are you aiming your services at and why?

All of the above! LINX Networks services are aimed and can be tailored to all types of trading desks – securities traders, brokerage houses, banks and hedge funds. This is because the IP Trade software can be tailored to each desk or to user-specific demands. Each user starts with a blank canvas and we then tailor each dealerboard to the clients’ individual requirements.

Where do you see the trading desk of the future heading, and what role can LINX Networks play?

We believe trading floors in general are moving towards a software solution rather than a combination of hardware and software. We also believe trading floors are looking more to the cloud, whether for hosting a whole floor or just from a disaster recovery perspective. We have already taken steps in this regard and invested heavily in our cloud solution. We can offer a turret and private wires in the cloud to any trading floor at a fraction of the cost of legacy alternatives.

The IP Trade soft turret is already proving that the market is moving this way. We have just recently installed an IP Trade soft turret solution for a major financial floor in London allowing them to move away from old traditional hardware turrets onto a soft-based turret solution. Their head traders can now work anywhere in the world and be able to trade at maximum capability with no disruption. All they need is a device – a laptop or even an iPad – and an internet connection. It allows traders not to miss a single trade, and is all fully secure under FCA – it’s a ground-breaking change in IT trading technology.

We also believe virtualisation is key. When we meet prospective clients who are using old dealer boards on their trading floor, for many the first thing they ask is whether they can remove their old racks from their datacentres and virtualise the whole floor? Thanks to the technology of our partners IP Trade we can.

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