Wall Street Letter 9/21/10
Titan Trading Analytics (TTA) is making preparations for a wave of new proprietary trading firms and hedge funds expected to launch in response to the implementation of the Volcker rule this summer. The software development firm, which also runs asset management subsidiary Titan Trading USA, plans to launch a browser-based offering that will provide access to actionable, quantitative research. John Coulter, recently appointed president of TTA, declined to fully detail the service, but said it would be based on the firm’s internal model, in use on its own trading platform, that is based on 10 years of back data from market activity. TTA plans to roll out the platform next month.
The idea is to provide support for hedge funds and prop firms that will be filled with bulge bracket veterans who are used to more technical and research support than what they will have at a new, smaller firm, Coulter said. The platform will integrate with any existing trading platform. “It’s a completely atypical approach,” he acknowledged, noting that the firm is in a unique position because it’s spent the time and money to gather the data and build the platform. “You need to have quantitative strategists and C++ programmers to manage this,” something that most new firms wouldn’t have starting out, he added. The offering is designed to provide TTA with a second revenue stream that will insulate the firm from any potential decreases in asset management revenue, a change the firm set out to make just a few years ago. The service will be offered on a subscription basis.