Whether you are trading Eurodollars in Chicago, FTSE 100 futures in London or Nikkei contracts in Tokyo, there is little to distinguish the style of listed futures and options trading or the regulatory requirements involved.
From the trader’s perspective, the hundreds of thousands of instruments and the multitude of exchanges on which they trade are all part of a large but essentially homogenous international marketplace. As a result, it is a market on which the sun never sets. When the day’s business finishes in London, traders want to be able to seamlessly hand over client orders to their colleagues in New York or Chicago without losing their place in the queue.
Technology is the means by which this huge, sprawling market can be shrunk down to manageable proportions: a global order book that gives tier one futures and options traders the worldwide visibility they need on a single platform with a seamless international transfer of workflow and a focused view.
This is the challenge. It means that the largest futures and options players who typically participate in this market have to maintain connections to 50 or so global exchanges on an integrated low-latency solution at the same time they are providing the full range of workflows that clients demand.
As with equities before them, traders of futures are finding that a flexible approach is needed so the right balance of latency, risk checking, throughput and functionality can be achieved. A number of venues are doing whatever they can to attract high frequency traders to win the low-latency game. Standard FIX APIs, co-location, exchange-level risk checks and sponsored access are all available and being promoted heavily to attract liquidity.