Best Independent Algorithmic Trading Technology Provider: Tradepoint Systems

The idea that execution algorithms are developed by equity market people is no longer valid. As the popularity of algo trading grew, market participants with a background in FX started developing tools to suit the unique structure of the FX market, bringing an extra layer of understanding to FX algos.

Eric Adelman, president and chief executive of technology provider Tradepoint Systems, says the idea of a product built by FX specialists exclusively for FX markets is what has driven the creation of Lightning FX over the past three years.

This focus earned Tradepoint the top spot in the Best Independent Algorithmic Trading Technology Provider category at the 2016 FX Week e-FX Awards.

Our ambition is to build the features our clients prefer not to build in-house, yet allowing them to easily insert their key differentiators into our stack
Eric Adelman, Tradepoint Systems

The Tradepoint engine uses a layer of algorithms and it differentiates itself from competitors in three key ways: more turnkey algorithmic intelligence; improved flexibility through the use of modifiable open-source code and a better componentised design.

"Our ambition is to build the features our clients prefer not to build in-house, yet allowing them to easily insert their key differentiators into our stack," says Adelman.

Tradepoint provides clients with licences for the logic underneath the algos, so users are not only able to modify them, but they know exactly what lies beneath the different layers. In this way, says Adelman, the company is inherently transparent with its clients, which helps them to be compliant in the eyes of regulators.

Consequently, one of the most important customer segments for Tradepoint is the sell side, including banks, which can then provide these tools to their own clients.

"Tradepoint's FX algorithm offering provides out-of-the-box trading algorithms that intelligently understand and interact with the market, yet we recognise many of our more sophisticated clients prefer to leverage their own strategies, so the solution is also made to be extensible by our clients," he adds.

New seams of demand

This trend for transparency in all aspects of trading is creating new seams of demand, as regulators and clients alike want reassurance that the threat of glitches or compliance headaches resulting from unclear practices are staved off.

"Regulators want to see more of the logic underneath algorithms and the decision tree they go through to protect against runaway rogue algorithms or those that may not treat customers fairly," says Adelman.

One area where additional demand may come from is the credit intermediation space, where the expansion of prime-of-prime providers is creating additional layers of complexity in technology.

"The prime-of-prime space is changing the industry, creating demand for more technology to support prime-of-prime brokers and their consumers. The industry is changing, and change is good for technologists like Tradepoint," Adelman adds.