Market Maker

Pricing in high-touch markets is largely negotiated via voice and instant message, entailing extensive manual entry of data from voice conversations and from inbound instant message chat to separate outbound chat windows as well as into a market maker’s pricing models, risk management systems and exchange order routing platforms.

For market makers, Pivot™ developed a version of Pivot 360™ with Instant Markets™ to aggregate incoming instant message data flowing from interdealer brokers, broker/dealers and buy-side market participants into a consolidated data feed, which is instantaneously fed into a firm’s pricing and risk engines and displayed in a consolidated blotter that enabled liquidity providers to monitor all available queries, bid and offers and respond to them instantly.

Pivot’s™ market maker system includes specially built and customized API and STP modules as well as the firm’s proprietary text parsers deployed in a seamless integration. The product uses an API to capture all incoming messages from various sources, including chat, email and other sources (e.g. Tweets) from any instant messaging network including Pivot’s™ proprietary network, AOL, Yahoo, Microsoft OCS or a firm’s own network.

Chat messages are run through specially built parsers that convert the text-based chat into structured, machine-readable product and price data. This data is fed into a firm’s price and risk engines via the API in real-time.

The data is also immediately displayed on a blotter enabling market makers to see all relevant deal information in a one centralized location with product and pricing details parsed from the incoming instant messages as well as prices generated by the firm’s price engines. Traders can respond to incoming trade queries directly from the blotter with a single mouse click.

In initial implementations with leading market makers, the new solution slashed response times to queries from between 30 seconds to 1 minute to under a second. This speed advantage, as well as improved order entry accuracy, enabled market makers using the system to win a significantly higher percentage of deals, which generated a multiple of their previous trading revenue.