Sybase's Risk Analytics Platform Targets Capital MarketsBy Theresa Carey | Posted 05-24-2005
Driven by the growth in electronic trading, characterized by low margins, Sybase Inc. has designed this solution specifically for supporting trading applications in the capital markets.
The platform is composed of three interlocking software products, which work together to feed trade data into user-selected models.
The first piece is Sybase IQ, an analytical database, which can store massive quantities of market data while enabling fast queries.
The second piece is an optimized data model that describes each unique capital market data instance.
"Our data model differentiates our solution because it accurately describes the capital market," says Ian Warfard, director of the financial solutions group at Sybase.
The top level of the platform is Sybase's Power Designer, which lets users extend the model and manage the operation of the Sybase IQ database and data model.
The platform ships with it a number of sample trade and quote queries that automate several algorithmic trading models, such as VWAP (volume weighted average pricing) and TWAP (time-weighted average pricing).
Warfard says that Sybase's customers are demanding the ability to store historical trade data.
The Sybase Risk Analytics Platform consolidates multiple products and data feeds and puts them in a single repository.
Warfard notes, "What we're doing is providing as part of our Risk Analytics platform the ability to consolidate all those silos of information into a single repository."
Dean Marchetti, director of engineering at Sybase, says, "With Sybase Risk Analytics Platform, we deliver a unique consolidated risk and trade data repository that is actually capable of capturing and consolidating volumes of real-time market data and deep historical data to support more effective, near real-time trading analytics. This allows our customers to spot trends and opportunities buried in the data and act on them ahead of the competition."
Many capital markets customers worldwide currently use Sybase IQ as the engine to support their risk analytics and trading solutions, including eSpeed, Millennium Partners, Citigroup and ITG (Investment Technology Group Inc.).
"As data volumes continue to increase at an almost exponential rate, it is imperative for financial sector companies to rethink their risk management solutions. As data speeds up and as more trading is done from the client site, firms need better ways to understand exposure, improve investment capital returns and remain competitive," said Larry Tabb, founder and CEO of The Tabb Group.
"While there are different approaches to accelerating risk analytics, it is very important that the solution be lightning fast, highly scalable and able to integrate efficiently with existing applications."
Most trading algorithms require last tick data as well as a wealth of historical trading data. As part of this strategy, Sybase incorporates real time ticks and historical data within the Risk Analytics Platform to give users up to the minute trends. Different types of data can be maintained on separate platforms, and then pulled into the consolidating platform when needed.
Warfard says, "The vision for banks is to get real-time enterprise-wide risk management up to speed. Trading has become so fast that no longer are yesterday's risk calculations worth anything. We're heading toward real-time profit and loss monitoring."
Sybase doesn't provide the algorithmic trading engines, but has built hooks into the data to support the key algorithmic trading platforms that currently exist, such as those supplied by Sungard and other proprietary systems.
Each bank has put together its own proprietary system, mostly developed in-house, so Sybase's role as a data consolidator is to build hooks into those platforms that allow the consolidated data to be fed in to the models quickly.
Warfard says, "What the Risk Analytics Platform does in a nutshell is enable a few basis point of differentiation on a day's trades, which can translate into millions of dollars for an investment management firm." Arbitrage is one example since it requires sub-second information on a couple of ticks, and opportunities appear and disappear rapidly.
Sybase Risk Analytics Platform is currently available in a Development and Testing version, as well as the full Deployment version. Sybase Risk Analytics Platform includes Sybase IQ, which is available in two production editions, Enterprise Edition and Single Application Server Edition.
Sybase IQ Enterprise Edition is included as the analytic engine for Sybase Risk Analytics platform. For additional information on the Sybase Risk Analytics Platform, visit the Sybase Web site.
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