Correlix Signs Up CBOE For Latency Monitoring
November 3, 2010
Correlix Tuesday will announce that its latency monitoring service has signed up its first derivatives market.
The Chicago Board Options Exchange, which is the largest U.S. options exchange and creator of listed options, will become a customer for Correlix' RaceTeam latency measurement service.
The announcement comes almost exactly a year after Correlix signed up Nasdaq OMX Group, operators of the Nasdaq Stock Market, as a customer. Since then, the New York monitoring firm also signed up the Direct Edge exchanges in July and the Lime Brokerage, which specializes in executing orders for quant and high-frequency traders, last month.
The CBOE move "illustrates a trend where more latency-sensitive trading firms are expanding to new asset classes,'' said Shawn Melamed, president, founder and CTO of Correlix.
High-speed traders, he said, are developing strategies across asset classes, which makes latency data across exchanges in those classes important. Traders may, for instance, be trading in options, but hedging with trades in shares of the underlying stocks.
Availability of latency data by exchange helps the traders "fine tune" their algorithmically-driven strategies and lower the "hit or miss" ratio when placing orders, Melamed said.
"A strategy becomes more predictable,'' he said, and the data "gives them a temporal map of where the opportunities are in different markets.''
The CBOE will provide real-time data on its existing CBOE exchange and its new all-electronic C2 Options Exchange, using the RaceTeam service.
“This service will help our customers better understand how their orders are being processed and, ultimately, we feel that this added degree of transparency will help them trade on CBOE even more effectively than they do currently.” said Gerald O’Connell, CIO and Executive Vice President of Systems at CBOE.
