Blue Trading Systems, an independent provider of trading software, is rolling out a new platform called BTS Spark that is designed specifically for high-speed spread trading of futures. The company, which is based in North Carolina, specializes in providing high performance software for options market makers. About a year ago, the company realized that there was an opening in the futures space, according to Kevin Darby, the managing partner. BTS heard that people "were upset that the algorithms weren’t fast enough, they were upset at the price point, and they were upset that their proprietary algorithms were basically being hosted outside their four walls," he said.
The company’s new platform is aimed at addressing all three of those concerns. Darby estimates that BTS Spark should be able to achieve quote round trips of under 20 microseconds. The operating software is written in C++ for low latency and the design is very lean in order to keep the system fast. He added that the platform can be integrated with FPGA chips developed by Celoxica for further acceleration. FPGA chips can be used to accelerate processing by taking compute-intensive portions of trading functions out of the hardware's central processing unit. "You’re only going to be able to do so much with software," he explained.
The team also addressed the control concerns by offering the option of local hosting. "We see a lot of the current customer base being pushed to a cloud model offering and we purposely are going the other way with that. You can host us it with us if you like—we’ll be glad to host you so you don’t have to worry about that—but you can also install it privately in your own data centers and we won’t have anything to do with it other than normal support," Darby said.
But the pursuit of speed hasn’t been at the expense of risk management. "We have the full suite of risk limits," he said, including an order per second limit, user log-ins, sub-account permissioning, and automatic cancellation on disconnect.
The code is all new, Darby said, but the core team behind it has been working with him for the past 20 years. He and his three partners originally worked for a market-making firm that spun out its software arm as a separate company in 2011.
