How we stay ahead of the curve to execute trading strategies

Cutting-edge technology is not the only factor to be successful in this highly competitive industry; what’s equally important is how we understand that technology and apply it across our diverse trading operations.

How does DRW stay in front of the latest cutting-edge trading technology trends?

Our experts have a variety of technical expertise, and always ensure the firm has access to the latest information in the industry. Typically, this information sharing is done through training, participating in conferences and regularly meeting with companies that are providing bleeding edge technology.

Access to cutting-edge technology is not the only critical success factor in this highly competitive industry. What is equally as important is our understanding of the technology - so we can get the most out of it. I like to illustrate this by making an analogy with Formula 1 drivers. In this car racing competition, technology is certainly crucial to help constructors build the most performant car possible. However, the team needs the driver to understand how to use and trust the technology behind the car so he can push it to its maximum capacity and safely finish first. The same concept can be applied to our field; we need a deep understanding of the technology that we are using so we can push it to the limit of its capacity and cross the finish line first. Our goal is to always be early adaptors of technology and maximize the benefit through our expertise.

Please explain how the firm uses technology to execute trades. What kind of collaboration exists to implement new technology?

Technology is now omnipresent in the financial markets, and when it comes to latency sensitive trades, it is critical. In the low latency trading context, technology is used to accelerate the decision-making and execution.

We develop our own propriety trading platform and use it for ultra-low latency trades. The platform is designed to acquire data that are relevant to trades, process them based on our proprietary strategies and execute our order to the exchange. The design process involves different experts with varied expertise such as software, hardware, networking and trading. Indeed, collaboration between these different groups is key to build a tailored trading platform.

Every technology component of our trading system has its own benefit but also its own limitation, so as a team, we work to ensure that they are being used in their optimal environment. For example, powerful computers with lots of resources can be better to handle complexity while other hardware components with more limited resources can be more powerful to accelerate trade. However, not all the trades need that level of speed, so our trading ecosystem is diverse.