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March 30th, 2023

Proprietary trading firms serve a crucial role in the world’s financial markets by providing liquidity, a particularly important function when markets are as volatile as they have been recently. For the firms themselves, such high levels of volatility can present unique alpha-generating opportunities, which might not otherwise exist in less choppy markets.

A recent industry report from Acuiti confirms this. With high volatility expected to continue across global markets in 2023, proprietary trading firms surveyed, predicted another strong year, and many are now increasing their technology investment budgets as a result[1].

This is perhaps not surprising. In order to perform their role efficiently, effectively and profitably, it is essential that proprietary trading firms invest in the appropriate technology to support their activities. So what are some of the key elements that such firms look for in their trading systems as they plan for future growth?

[1] https://a-teaminsight.com/briefs/proprietary-trading-firms-plan-to-increase-tech-spending-in-2023-says-industry-report/?brand=tti

Throughput and the ability to scale

It’s not unusual for proprietary traders, particularly those running program or basket-style strategies, to generate thousands of orders per second during periods of high volatility. The trading platforms they use to execute these orders therefore need to be able to comfortably handle this level of throughput, at speeds fast enough to ensure that their basket or program trades get fully executed. Being left with partial executions or hung orders as a result of system latency or bottlenecks is clearly unacceptable, particularly during the market opening and closing sessions, where trading volumes are often at their highest and speed to market is essential.

System scalability and elasticity is also an important requirement for proprietary trading firms. Often the nature of proprietary trading is that certain strategies have a limited shelf life, meaning that firms need to quickly ramp up their trading as they discover new opportunities, before alpha erosion occurs and profitability is reduced, at which point they may wish to scale down again. This is why trading systems designed around a microservices-based architecture are well-suited to such firms, because of the flexibility they offer around how services are configured to scale.

As a cloud-native platform built around a microservices framework, TORA, an LSEG business, is not only designed to handle the kind of throughput demanded by today’s proprietary trading firms, it is also built with scalability in mind, offering the ability to rapidly scale up or down by any chosen criteria; per strategy, portfolio, instrument, asset type, market or region, for example.

APIs & open technology

Regardless of whether proprietary trading firms run ‘point & click’ trading desks or are more systematic in nature (many are actually a combination of both), their trading platform should be able to accommodate their chosen trading style and to seamlessly integrate with their existing systems.

For point & click traders, this means having a functionally-rich user interface (UI) that provides real-time actionable market data and analytics, order/execution status & history, positions, P&L and other relevant information, all delivered through a normalised, intuitive dashboard that can cover the various instruments, asset classes and markets they trade.

For systematic traders, it is essential that the platform offers flexible, well-documented and highly performant APIs (application programming interfaces), so that trading models can be integrated, and orders generated and submitted to the markets automatically for electronic execution.

TORA supports both. As an API-centric solution with an intuitive, functionally-rich front end, TORA is ideal for proprietary trading firms that conduct both point & click and systematic trading.

Risk and compliance

Risk management, both pre- and post-trade, is fundamentally important to proprietary trading firms. As liquidity providers who take on risk, they need to be able to constantly monitor and manage that risk. This is another area where an open platform with full API access such as TORA offers clear benefits, because it enables automated interaction with internal risk and compliance functions. If there are compliance breaches within the trading flow for example, those breaches can be picked up through the API and dealt with accordingly, even to the extent of approving or rejecting orders based on pre-defined logic or programmable thresholds.

As a true cross-asset solution, TORA provides a unified image by bringing all portfolio and position data into one place. This means that users can slice and dice portfolios and perform risk metrics at any level, using any bucketing criteria; across asset classes, across portfolios, across strategies, across markets, or across trading desks for example.


With the current high volatility expected to continue across global markets well into 2023, and with proprietary trading firms predicting another bumper year, it is vitally important that they invest wisely in trading technology that can not only accommodate their growth in trading volumes, but also provide them with everything they need to manage their risk.

This is why forward-looking proprietary trading firms are increasingly adopting open, scalable, functionally rich trading platforms such as TORA, which provide the ability to connect to financial markets around the world, through a single cross-asset platform, with multi-broker support.


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