Even if you are not an open source fan, you have to appreciate the strategy of Marketcetera and admire their market positioning of riding two major trends of a move towards open source by Wall Street and a move towards automatice stock trades as pointed out in this news story.

Its automated-trading platform is an alternative to commercial software or in-house development.

The story of open source's success was first about the software "stack"--with Linux, Apache, MySQL, and PHP as the shining examples--followed by applications such as CRM, ERP, and business intelligence. Industry-specific open source is a natural next step. Marketcetera is aiming for Wall Street firms with its upcoming automated-trading software.
----John Foley

MARKETCETERA

HEADQUARTERS: San Francisco

PRODUCTS: Marketcetera Platform, open source software for automated stock trading

PRINCIPALS: Graham Miller, co-founder and CEO; Toli Kuznets, co-founder and CTO

INVESTORS: Shasta Ventures, individual investors

EARLY CUSTOMERS: Unnamed financial firms and hedge funds

	Miller once managed e-trading for a hedge fund

 

OPPORTUNITY

Thirty percent of stock trades are executed automatically, a practice that's on the rise. At the same time, the financial firms that trade stocks--brokers, hedge funds, asset managers--were among the early adopters of Linux and MySQL. Marketcetera sits at the intersection of those two trends. And its software supports custom tuning for those that need it.

NEED FOR SPEED

Automated stock trades are executed in fractions of a second, and options data feeds spew a million messages per second. Marketcetera's software works at the front end of this split-second process. CEO Miller says one of the first questions he gets asked is, "What's your latency?" The answer is a few milliseconds between a quote and an order. Trading algorithms provide the software smarts behind superfast transactions. Marketcetera doesn't provide algorithms; it leaves that to customers.

COMPETITORS

FlexTrade and Portware are commercial software alternatives, and some Wall Street firms develop their own automated-trading programs. Marketcetera's trying to squeeze in with a GPL approach.

THE PIECES

The Marketcetera Platform consists of order entry, order management, and trade activity reporting capabilities, plus a utility for bulk loading trade orders. The server components come packaged as a VMware appliance that's preconfigured with Ubuntu Linux, MySQL, and Ruby on Rails. Marketcetera supports the industry standard Financial Information Exchange protocol for electronic trading. The architecture implements Microsoft (NSDQ: MSFT)'s .Net API, the Spring Framework, and ActiveMQ middleware.

TIMELINE

 

By: John Foley
Source: InformationWeek