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Flush With Data, Thomson Adds a Tool Set
June 26, 2006
Like other market data vendors, Thomson Corp. is, well, full of it. Financial markets are spewing quotes, ticks and other directional indicators at ever-increasing rates, and Thomson has long vied with Bloomberg, Reuters Group, exchange-based services and others to distribute and supplement that raw informational material that ultimately drives investment decisions. But only now is Thomson putting its data together with complementary analytical tools specifically for quantitative traders.
It's the result of Thomson's March acquisition of Quantitative Analytics, a Chicago software house best known for the MarketQA database of historical securities pricing information, updated daily. Along with MarketQA came the FasTick suite of data capture, storage and analysis tools that are being rebranded Thomson FasTick History and Thomson FasTickRT--data capture, storage and analysis systems with a real-time component geared for hedge funds and others that need analytical immediacy to support instantaneous decisionmaking. "Hedge funds and algorithmic traders are very interested in this product--it has both historical and real-time components," said Bill Aronin, president of what is now Thomson Quantitative Analytics.
It's not as if Thomson and its acquisition were not already reaching hedge funds and other sophisticated, high-frequency trading outfits. Hedge funds are a growth segment within the Thomson buy-side client base of nearly 8,000 institutions, and Quantitative Analytics serves some 200 buy- and sell-side firms whose operations are directly or indirectly influenced by hedge funds' demands. The difference, explained Suzanne Wordock, commercial manager for Quantitative Analytics and investment manager at Thomson Financial in New York, is in the synergy and the tool set: "Thomson has a lot of great data to offer. Now we not only have the data for the future build-out of the business, but also a way to directly serve the quant space and program trading," as well as an ability to fulfill the extensive transactional-data requirements associated with Regulation National Market System compliance. Wordock added that Quantative Analytics developed integration capabilities, encompassing Thomson data as well as that of third-party sources, that not only improve Thomson technologically but "bring us a technology we never grasped, in a space we hadn't been in."
As it brings FasTick History and FasTickRT, which were historically stand-alone offerings, onto the Thomson One investment management platform, Thomson is strengthening its content business by enhancing its infrastructure--a strategy that has become a necessity for market data vendors, according to a recent report by Tom Price, senior analyst for securities and capital markets at Needham, Mass. research firm TowerGroup. "As various requirements and strategic scenarios have emerged," wrote Price, "the variety of platforms has multiplied. ... Choosing the right option depends on cost, data volumes, and changing regulations; market data professionals must figure out how to get the biggest bang for the buck while satisfying user demands. The changing landscape has created opportunity for new information sources and diverse solutions, and both established players and new entrants into the race have responded."
Price slots Thomson in the category of content providers that also includes Bloomberg, Reuters and ComStock, characterized by "partnerships and vendors redistributing competitors' content" and by "a tremendous influx of quotes as the exchanges publish deeper slices of the book. All of this information has to be packaged and distributed, which will inevitably change the traditional distribution methods."