Financial & Economic Blog

ピカデリー・サーカス（Piccadilly Circus）の交差点に近年オープンした、バークレイズ（Barclays）銀行の支店。中の入口付近にはATMがいくつかあり、宇宙ステーションを彷彿させるチューブ式の電光掲示板が天井から吊り下がる、広々としたスペースの奥に接客カウンターがある。口座は持っていないのだが、バークレイズは私たちが使っているアメリカの銀行と提携しており、手数料なしで現金が引き出せるので、たびたびお世話になっている。

バークレイズは1690年にロンドンで創業した老舗銀行で、現在金融機関世界第4位、HSBC銀行に次ぐイギリスで2位の、国際金融グループ。イギリスに1800以上、世界で50を超える国に4750以上の支店を持つ。現在、イングランド・プレミアリーグの冠スポンサーであり、「バークレイズ・プレミアリーグ」と称される。創業以来続くワシをかたどったロゴは、何度も修正を加えられてきたものの、300年以上の歴史を持つ。2007年にオランダのABNアムロ銀行との合併が噂された時、合併が成功した場合、ナチスドイツのシンボルのワシと似ているとされるこのロゴを変更する準備があると報道されたが、結局合併話はお流れになったので、今でもワシのロゴを維持している。現在のロゴは、2004年に行われた大々的なコーポレート・アイデンティティの変更の際、新フォントとともに、若者をターゲットに、ラインを簡素化したソフトなデザインになった。

Barclays‘ Piccadilly branch opened in recent years at the intersection of Piccadilly Circus. There are some ATM machines near the entrance and customer counters are placed all the way back through the space station-look digital information tube hanging from the ceiling. We don’t have a Barclays’ account, but we often use their ATM as our American Bank has a cooperation with Barclays and we can get cash with no fee.

Barclays Bank is major global financial services firm and traces its origins back to 1690 in London.  Barclays is the fourth largest financial services provider in the world and is the second largest bank in the UK after HSBC, and has over 1800 UK high street branches and over 4,750 branches in over 50 countries worldwide. Barclays currently sponsors England Premier League, officially known as the Barclays Premier League. Barclays’ eagle logo has over 300-year history with some modifications, but in 2007 it was rumored to be changed when the merger plan with ABN Amro came up, in order not to offend its Dutch counterpart – because the eagle logo was associated with Nazi’s eagle symbol. Barclays still has been keeping the eagle logo, as the merger planed didn’t work out. The logo was modified to more softer and simpler shape to appeal to younger people, during the complete overhaul of its corporate identity in 2004.

A fund manager chatting with his algo trader prepping for the 9:30 AM start to millisecond races.

In the hyper-competitive world of Finance, companies are in a never ending race to cash in on market intelligence.  Demand for innovation is simple, a need for real-time access to market information to be smarter and act faster than the rest of the pack.  The revolutionizing induction first hit the Street in the summer of 2005 as a technology spin-off to advance (HPC) high performance grid computing, launching information comprehension to a completely new stratosphere.  Hence the birth of high throughput computing (HTC) on Wall Street…  New for Finance however, these computing practices have been around for awhile within the government and research communities.

The old days of verbally relaying buy and sell orders from the sidewalks up to traders hanging out of the New York Stock Exchange Building on Wall St. are long gone.

Botique technology firms have huddled in the financial micas of lower Manhattan and London to design state of the art trading platforms which drive some of today’s most lucrative financial firm.  Notably, some of technologies greatest feats can be attributed to the financial industry as a whole.  Hedge funds, brokerage strategies, buy and sell methodologies are all made possible through technology development and software implementation services.  Investment firms contract technology groups who specialize in “the art of concept to code,” who work under strict confidentiality agreements.  Working together the world’s greatest minds privide mathematical formulas, dynamic models, entity mapping, proofs and logic correlations that are built into functional tools to navigate across both public and private cross-trading networks.

To understand trading strategies you need to understand the basic principle of what an algorithm is.  In short, it is an automated process by which a computer can make a decision based on pre-determined information (data) you feed it.  It then performs an action based on the criteria you pre-set/programmed for the computer to make that decision.  Popular examples of algorithms are seen with Garry Kasparov, the world renowned Chest Master vs. IBM’s computer, “Big Blue;” Garry lost.  Slot machines a.k.a. the flashy one-armed bandit uses a (RNG) algorithm program; and as we know, the house always wins … at least at slots … for any of those hardcore card counters out there…

Achieving success goes beyond just having a fast computer.  A computing centers primary responsibility is to provide high availability (computing grids) for complex event processing power needed to run 24/7 real-time analisis on multiple global trading platform environments.  Financial engineers, many with Mathematics PhD’s, have deep understanding of algebra and calculus as a core ingredient to there investment modeling strategies.  These numeric calculations are centric to the software logic design rules that result in trading profitability.  Depending on a fund manager’s strategy, trading programs are made up of a myriad of historic and real-time: economic data, news updates, market conditions, liquidity pools, pricing schemas, investment instruments, and exchange rates are some datasets taken into consideration.  Customized analytics are then built round these datasets in the form of applications.  That allow traders running powerful algo trading programs to view and adjust market activity via advanced interfaces on their PCs.  Market information is then filtered against pre-selected ‘rules’ that identify (fractions of a cent profit margins) positive correlations which trigger investment actions i.e. “buy” or “sell” orders; all within a couple milliseconds.

Flash orders are the host stage for algo trading to run trade matching functions to uncover opportunities in what I like to call a “liquefied resonance application server state” for millisecond transactional efficiency.  The biggest industry sluggers are trading firm experts like Renaissance Technologies, Quantum Group and Goldman Sachs.

Fund managers and traders work together with customize smart market intelligence platforms that are rolled-out for day-to-day use.  They monitor multiple trading exchanges world-wide searching for profitable opportunities.  Since 2005 (HTC), daily trade volumes have risen over 164%, per the NYSE.  Technology has been the precursor, for the financial industry to access and digest dramatically higher volumes of data.  It truly has fundamentally revolutionized daily trading activity.  Known as high frequency traders, they target large volume transactions.   And, represent a very small fraction of the overall trader population.  Weeding through millions of transactions they uncover opportunities to match “buy” and “sell” requests within dark liquidity pools for lower transactional fees in semi-transparency, as to not tip off their competition.  An estimated $21 billion in annual aggregate profits are generated from this low latency (grid computing) arbitrage investment strategy, according to TABB Group.  It is important to note, a very select percentage of institutions leverage this technology.

Let’s build one, we can put the data center in the Caymans…