Trends and opportunities in the finance world
1) What trends and opportunities does mobsource see in Asia?
The likes of 8 Securities, http://www.8securities.com/ that run on Amazon are changing the face of trading as we know it – there is a definite shift where “Good Enough” technology beats perfect every time, because good enough is better faster and cheaper.
Mobsource on demand trading network acts in the same way – we are defined by benefits and not by technology and this is what keeps 90% of traders and brokers happy.
2) What are the challenges and barriers in delivering your products and services in Asia ?
The adoption of cloud is happening very quickly, market data and FX platforms are today, delivered on cloud so I see no reason why exchange to exchange or venue to venue connectivity cannot be delivered in much the same way. The challenge is being in all places but that is a great problem to have as demand increases.
3) Tell us about the Chicago Sydney and singapore service and is mobsource planning to offer a similar service to other Asia Exchanges?
We are getting a lot of enquiries from Chicago looking for lower cost ways to tap into the futures markets down in Sydney. Their options today are limited to 12 month contracts and often cost prohibitive so we decided to build a service that Links with Sydney (Equinix) for a fixed fee of $1500 per month and any usage on top of this on a pay as you go basis - this means when the markets are closed, you are not being charged for bandwidth - we are turning a traditional fixed cost into a variable cost whilst at same time, making the Network as a Service (NaaS) available for 99.9999% of the time, this equates to around 3 seconds per year worth of outage - this in itself is fundamentally game changing as no carrier will offer you this on their networks. We can do this because of the diversity in our supply. We have had enquiries from India and China energy market participants also so it is encouraging and we may explore these options.
4) There has been a lot of negative press about HFT lately. What is your view on HFT and does your service have a place for them in Asia?
I think it does, although demand is still pretty low in Sydney from HFT guys. Even the fragmented market has not really taken off. At last count I heard the alternative venue had 20 or so participants but 80% of the volume was made up by 2 prop shops /market makers.
For note - Some of the global cable operators have spent hundreds of millions of dollars building super fast networks with low latency in mind only to find that the demand from HFT players is pretty low - They would need to sell a very large amount of contracts to fill up their pipes, this isn’t going to happen any time soon - The justification from the big end of town institutional players is there but they demand services at below cost price - and buy once a year or so – this is a finite market and operators margins are seriously put to the test. In the end, they discover that this model is completely unsustainable. There is and will always be a massive amount of their bandwidth that is idle, stranded or just not lit – mobsource provides a way for the providers to sell via the bandwidth dark pool and start to get a return on their capital investment
What benefits does mobsource deliver the market?
Apart from a much lower cost for customers we provide A place for carriers and ethernet providers to slow down their margin erosion. Bandwidth suppliers can anonymously sell their excess capacity to those that need it. Protecting their brand and margins
In the finance world – A “dark pool” of liquidity is trading volume liquidity that is not openly available to the public and where the bulk of these represent large trades by financial institutions that are offered away from exchanges. One of the main advantages for institutional investors in using dark pools is for buying or selling large blocks of securities without showing their hand to others and thus avoiding market impact.
For the buyers, brokers and traders, mobsource acts in the same way by connecting them allowing an exchange of bandwidth to take place on demand – without affecting market price and of course, at a much lower cost.
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