Goldman Sachs in talks to acquire Trading Technologies

Big banks going down the professional trading platform route? Let’s take a close look…

Goldman Sachs is reportedly in advance talks for a $500 million takeover of Trading Technologies.

Citing four unidentified sources, Global Investor Group says the US investment bank is in late-stage talks about buying the Chicago-based trading and data analytics software firm. Rumours that Trading Technologies was looking to be acquired first began circulating last month.

Founded in 1994, TT supplies software to most of the world’s biggest investment banks, brokers and trading firms, and the company struck a deal with Goldman Sachs in September last year to distribute the Trading Technologies platform to the firm’s client base.

Trading Technologies has an illustrious history, and is one of Chicago’s mainstays within the professional trading sector. In 2016, FinanceFeeds met with key executives at the company to look at how the innovation behind the company’s new TT platform is progressing and where it will lead this year.
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Trading Technologies showcased its new platform in 2016, majoring on its position as a SaaS for professional entities

During the conversation in Chicago, the firm explained to FinanceFeeds “We recently launched a new platform called TT, which is delivered via SaaS, and is also colocated in all the major futures exchanges around the world as well as being hosted by us. It is fully integrated, which means that if a trader has a standard internet connection, then a workspace can be created on the desktop and later accessed from any Internet-connected device including laptop and phone,” said Ms. Shaples.” If a trader has entered orders on a desktop, then he can pick up the mobile device, walk away and carry on where he left off.”

Trading Technologies, which, whilst a multinational company, is headquartered here in Chicago, and the ethos of the company’s technological development reflects that clearly, as it draws its functionality and performance requirements from professional traders.

She concluded by explaining that, “the settings and current positions are replicated across all devices from our server. This has many benefits, including an alert which comes up to avoid a trader exceeding the amount of data feeds that they have allocated so that they do not get charged three times (once per device), therefore they can exit a session and carry on. This keeps costs down.”

Migration to new device-neutral TT platform

Mr. Mehta, Chief Marketing Officer at Trading Technologies, explained the migration to the new TT platform across its commercial traders.

“Since we launched the TT platform last year, we have been actively working on onboarding existing customers, whether they are FCMs, or proprietary traders. Based on our testing, we feel it’s the fastest commercially available futures platform,” he said.

“Trading Technologies is a global company, so we have customers in many regions, therefore over time our existing customers will be migrating to the new platform. They will find that the functionality and features will exceed what they have now and will organically make the switch.”

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Andrew Saks-McLeod and Brian Mehta talk platform technology advancements

“In terms of the current migration status, the original platform, X_TRADER is still supported, as the majority of our users are on X_TRADER, but with discussions with end users and those who are demoing it, we are getting good adoption,” Mr. Mehta said.

“As far as market parity is concerned, we are nearly at 100% of the markets on the new TT platform, and by the end of the year, we will be at complete market parity. The major exchanges, we have already covered, and we are now connecting to the others.”

“Equally important is feature parity, and with regard to achieving that, we are steadily making progress. We send out notices every month on new features and capabilities and we get great responses.”

“One thing that is really cool,” exclaimed Mr. Mehta, “is that the demo users have the same level of functionality that users of the production environment have. It is real data from CME. It is of course delayed data, but it perfectly simulates the live environment and allows traders to customize and set up their own trading configuration.”

What’s next?

Mr. Mehta continued, “Right now, our focus is the professional futures trader. Will we address retail? That is definitely an opportunity that we would like to explore. This platform gives us the possibility to explore different markets from our perspective.”

“We announced earlier this year that we are enhancing our charting and analytics capabilities. Other functionality that we will be adding is options trading. Our customer base has been asking for this for years, and for us to be able to offer this functionality will be great place for us and our customers.”

As the year goes on, Trading Technologies continues to concentrate on migration, expanding its user base and on new charting and analytics capabilities.

Mr. Mehta concluded, “With our platform, delivered through SaaS, it allows for greater flexibility to address user needs. With the flexible nature of this platform, we can quickly pivot and deliver new tools that can help our users get an edge.”

As time has gone by, Trading Technologies has managed to keep up with technological change and has been used as a reference point among its peers in Chicago, including aspiring new firms which have attempted to gain traction on the derivatives and professional trading scene.

Let’s just hope that all those patent lawsuits finally end and that if the deal goes ahead, the subconscious association among many of us between litigation and the Trading Technologies brand becomes less prominent.

 

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