How Electronic Execution Platforms Are Transforming The Trading Industry

The truth is that the financial trading model of the last couple of decades has shifted significantly. Previously, human traders had traditionally called and signaled across huge open pits. However, these days, sophisticated electronic execution platforms have made things seem easier. Trades are executed almost instantly in today’s virtual market. Also, there are technological requirements. Hence, electronic execution platforms can be stated that infrastructure and technology do contribute to the success of such companies.

Expansion period

Between the years 2000 and 2009, there was considerable growth in trading firms and the popularity of cryptocurrency. Several startup companies emerged and huge amounts of capital were invested in cutting-edge technology to gain a foothold in the industry. On-premise data centers and densely populated offices saw the introduction of high-powered trading platforms. This helped increase cooling and power needs while having a significant impact on electronic execution platforms. It also helped meet infrastructure requirements in today’s demanding work environment.

Things to consider

1. There was a need Supplemental cooling equipment in large numbers is needed to sufficiently increase the IT load. Also, it was needed to accommodate after-hours trading.

2. Reallocation of space was necessary to accommodate uninterruptible, centralized power systems, expansive telecommunication pathways, and high-density data cabinets.

3. To support monitoring clusters and personal computers, physical support was provided by workstation furniture. It also offered enhanced flexibility, thereby meeting each trader’s ergonomic needs.

Although such concerns are considered vital in the electronic trading workplace, new challenges do lie ahead that need to be tackled. For this, financial investments will be required.

Workplace surplus and plateau effect

Electronic trading has grown to some extent. However, in the last 4-5 years, it has been witnessing stagnation because of low interest rates and recession. However, how financial organizations can manage their risk is being changed by government regulations like the Dodd-Frank Wall Street Reform as well as the Consumer Protection Act. Also have declined profit margins, especially on trading transactions, due to a smaller investor base and increased competition. Hence, to be profitable, organizations have been investing in the latest technology and tax management, but with a highly conservative approach.

Economy slowdown

The economy in recent times has witnessed a slowdown. A good number of trading firms saw huge staff reductions. But now they have a surplus of underutilized infrastructure and real estate. This requires ongoing maintenance, thus leading to excess operational expenses and financial investments. Hence, to reduce such expenses, the space can be repurposed in a partial sub-lease agreement. It can also be relocated to another location. But each option comes with its pros and cons.

Example

A partial sublease agreement helps prevent staff and resource relocation in huge numbers. However, security risks are highly associated if there are multiple tenants sharing data center space on-premise along with common telecommunication pathways. Office relocation enhances flexibility while offering a secure work environment.

It also helps with tax management issues. However, it is necessary to plan space layout and re-evaluate cooling and power needs, available amenities, and utilities at different sites. also developed a proper IT migration plan. Since each option comes with its complexities, there will be significant coordination and expertise required to know what is deemed fit for the company.

Technology and Electronic Execution Platforms

High-tech trading firms tend to face more challenges. But still, technology is considered to be a critical component driving this industry. Organizations can respond effectively and execute trades in sensitive time parameters with enhanced data transmission speed. Some firms have co-located their servers close to exchange servers to reduce latency. LAN rooms have been over-provisioned with improved bandwidth and the ability to accommodate easily trade volume-based sharp spikes. Cryptocurrency is also favored.