CQG at FIA EXPO 2022: Bear market is best time to build crypto product

The derivatives trading industry gathered to discuss the most relevant topics, including regulation, market structure, clearing, post-trade tech, sustainability, geopolitics, 24/7 trading, direct market access, and…crypto. 

The (un)fortunate timing – the spectacular collapse of FTX – made crypto the hottest topic of an event full of established and reputed players within the derivatives industry, many of whom consider taking their first steps in the emerging asset class. 

This is the case with CQG, a company that has been around for more than 40 years now and has recently become the first independent software vendor (ISV) to join the FIA Tech Databank Network to help the ecosystem grow further and lead by example. 

CQG One brings advanced features to cloud-based trading and analytics platform

FinanceFeeds Editor-in-Chief Nikolai Isayev spoke with Ryan Moroney, Chief Executive Officer of CQG, one of the biggest names in the derivatives trading technology space. 

The company launched CQG One earlier this year. The cloud-based, HTML5 trading and analytics platform combines the ease of use of CQG’s retail-oriented platform CQG Desktop, with market data, charting, visualization and advanced features of its flagship professional trading platform, CQG Integrated Client.

“We wanted CQG One to bridge the gap between the two, taking advanced features of Integrated Client and bringing them to the new platform, including server side spreading tools, low latency algorithms, number of chart types and more”, he said, promising to continue adding features to CQG One, with a roadmap set for the next three years. 

CQG One is sold through FCMs exclusively, not via direct licensing with customers. “We look at brokers as our key partners. They provided a lot of feedback so they can offer it to their customers.” 

The firm has also adopted a new approach to its activity as it no longer sees itself exclusively as a product developer, but also a platform through which people can interact and build their own widgets and add them on the platform and market to their users, Moroney explained. 

CQG enters institutional crypto via Optio Research

CQG is also venturing into the digital asset space through a separate entity called Optio Research, which focuses on developing decentralized cryptocurrency infrastructure and trading solutions for institutional investors. 

The initiative is the product of a joint strategic investment by CQG and NUTS Finance, designed to bridge the worlds of traditional finance (TradFi) and the fast-growing decentralized finance (DeFi) space. 

The official announcement was made in late October; little did they know FTX would collapse, but the cataclysmic event proved CQG’s Moroney right in regard to the firm’s approach to crypto. 

“If we partner with the wrong firms, there’s a reputation risk for a company like ours. So, where do we go in the space? We formed a working group of four people earlier this year to figure out if there is something out of the box we can do, while controlling our risk…” 

Enter Optio Research, co-founded by CQG and NUTS Finance. The new venture will in a few weeks announce a major project for the institutional options space, Moroney told FinanceFeeds. 

“As a whole, we do believe crypto is going to survive; we believe it will mature. Institutions are going to come and when they do, they’ll expect institutional-grade tools”, he continued, adding that their goal now is to help build the crypto options market the way it should have been. By doing it via the Optio Research entity, the firm doesn’t take on reputational risk in the process. 

CQG chief executive Ryan Moroney also finds that the best time to build is in a bear market because many competitors aren’t fully committed. So, when it picks up, they will be too late. The firm believes there will be another big move of significant institutional adoption but ‘when’ remains unknown[, particularly based on recent events]. 

The experienced company learned through its four decades in the industry that there will always be external events to address, and what matters is hard work, quality products and the right principles. As long as these remain intact, the firm can be knocked down by financial crises and it will get back up again [and keep going]. 

Ryan Moroney also spoke about the CQG’s play in the algo space by acquiring [software from] Blue Trading  Systems (BTS) in mid-2020. The firm launched its algo product earlier this year: a suite of execution technologies including pre-canned sophisticated trading algos and a software development kit. These run as stand-alones or as an embedded piece in the CQG platform. The firm has seen growth of two to three times each month, and it’s starting to see in-bound demand. Word of mouth is the biggest driver of growth in the algo division as traders do talk to each other.