Investment banks typically consolidate distribution of real-time market data from stock exchanges and new services to a centralize department and infrastructure. This market data infrastructure then supplies data to the trading floors and trading application systems and to general purpose users throughout the bank. In addition many banks also support their external customers as well. The requirement for low latency high throughput messaging is well documented in this use case.

Example case: Merrill Lynch has publicly endorsed the Wombat infrastructure running on 29West's LBM messaging product. This infrastructure is in place at numerous banks around the world

Proprietary/Black Box Trading

Internal trading operations at banks are putting the banks own capital at risk by trading for their own accounts or as internal hedge funds using computer algorithms and automatic execution engines to make trades. Very tech savvy business people lead such operations. This activity requires low latency, direct market access infrastructure. These firms can be Foreign Exchange, equities or bond based, or multi-asset class.

Example case: Prediction LLC (subsidiary of UBS)

Prediction LLC was focused on low latency, high performance data delivery and had built their own black box algorithms using Smart Sockets for messaging.
UME was selected after extensive testing, comparing performance to an in-house solution and commercial alternatives.

Equity Sales

Equity sales is the act of selling ordinary equity products (shares) on the secondary market - orders filled by traders are based on established price and a time priority basis. Algorithmic execution engines used by sales traders are employed to get the best execution for clients. Many firms are advertising their algorithmic execution capability. Order routing is also important in this arena. UME is best for this area.

Example case: Free Software Evaluations by 29West are currently taking place with both algorithmic trading system vendors and IT groups and banks.

Equity Program Trading & Settlement

An equity program trading & settlement firm is computer-driven and automatically executes equity (share) trades, usually in large volumes across a set of 15 or more stocks. This activity requires low latency and a direct market access infrastructure. These types of firms are typically extensive users of FIX. The development of multiple electronically accessible pools of liquidity from exchanges, to "dark pools", to traditional ECN's translates to the fact that Equity Program trading desks are generating rapidly increasing amounts of smaller orders. The quotes and orders generated must be rapidly submitted and retracted at sub-milliseconds speeds. This profile is a classic fit for an LBM/UME messaging use case.

Example case: A Top 10 Investment Bank

A customer had an existing SmartSockets deployment and was looking to increase performance and move to a "fresher" messaging design
An initial evaluation of LBM and prototypes demonstrated a 3.5x increase in throughput and greater flexibility
After 6 months of extensive testing, a contract was signed for deployment on 700 CPU's across the equities technologies group
The move to LBM allowed the deployment of new applications and a higher performing solution

Fixed Income Securities/Govt Bonds

Fixed income securities trading includes government bonds, mortgage back bonds, municipal bonds, and a large variety of securities. Each type security trades off exchange through a different set of OTC electronic brokers and crossing networks like E-Speed, Bondhub, Blackbird, etc. This area requires UME for the combination of interfacing to electronic brokerages, internal order routing, and general messaging to risk and calculation engines.

Example case: Several banks have built prototypes in this area.

Foreign Exchange E-Commerce

Foreign Exchange E-Commerce is the trading of Foreign Exchange (currencies) via electronic means. This market is rapidly moving to deal-able streaming prices. This trend means that money center banks are offering completely live quotes that are immediately executable in both FX Derivatives and Spot markets. Very high volume of quotes and transactions characterize the FX Market. No exchanges, rather each bank directly connects to key liquidity players. In the spot markets, low latency is all important.

Example case: A major money center New York City bank is using LBM as the backbone of their 'data center' engines for quote distribution. Supporting both derivatives and spot trading intermingled.

Equity Settlement Services

Equity settlement services are responsible for the delivery/receipt of certificates in exchange for payment for an equity trade. Settlement occurs via clearing houses. The incumbent messaging systems are struggling with the volumes and demands that the new high frequency trading systems are putting on them. This activity requires UME to replace JMS solutions or MQ series.

Example cases: 29West is prototyping with two investment banks to use UME as the transport layer under their customized "enterprise trade bus" architectures. In these cases, 29West is replacing existing JMS based solutions.

ETDS, Futures & Options

Exchange Traded Derivatives (ETDs) are contracts sold through organized exchanges (e.g. CBOT, Merc, ICE). Users of LBM are typically electronic market makers or internal proprietary trading desks. Users of UME in this space are ETD execution services that execute programs of derivatives trades for hedging purposes for bank customers.

Example cases:

A typical market making installation will be processing the major derivative feeds like OPRA combining that information with a real-time position keeping/risk system and then generating two-sided markets back to exchanges such as the CBOE or Eurex.
29West also has several derivatives exchange customers that use LBM as their internal message bus to communicate between their customer access points and their internal matching/crossing engines.

OTC Equity & FI Derivatives Trading

This area focuses on the trading of Equity and Fixed Income swaps and swap based derivatives. Massive calculation engines and internal messaging applications are required. Interfaces to Swapswire and electronic brokers are required. Latency is not as large an issue as aggregate throughput. Latency can affect the market data input side of the calculations used. UME's durable subscriptions and persistence are a requirement here. Global distribution technology like 29West's filtering gateway are also required in this area due to the distributed nature of the market. Unlike cash markets, there tends to be more geographical dispersion.

Example cases:

Companies such as Smart Trade (a liquidity management system) have built infrastructures on top of UME. These infrastructures are in various stages of UAT in major banks.
A major investment bank is currently prototyping a fixed income pricing service using LBM/UME.