USER CASE

Evaluating Return on Investment in Collocation Facility Target: Quantitative Traders and Analysts, Heads of Product Development, Senior Executives.

CHALLENGES AND GOALS

► To predict and quantify benefits of investment in collocation facility without investing in trading infrastructure, data collection and analysis devices and legal/operating costs of collocation.

CASE DESCRIPTION

First of all, we created a virtual copy of a production trading environment using BEST Constructor components: Network Simulators, Client Simulators and company’s own applications embedded inside the environment. Then, we run performance testing on virtual environments and compared all performance figures with actual performance figures, in order to insure adequate representation of reality.

BEST Performance Testing Scenario Package was used for that. All the historical data was added to Exchange Simulator and then we run profitability tests in a virtual environment. We reconfigure the virtual environment to account for collocation speed advantages, changing proximity and throughput figures in Network Simulator. A set of performance and profitability tests were run in the new environment. The results were analyzed with Performance and Business & Trading Monitors. After all that, we evaluated business impact of improvements and returned on infrastructure investment.

REQUIRED COMPONENTS

► BEST Studio

► BEST Data Manager and Data Converter, or client’s own high frequency data storage solution

► Market Data Simulator

► BEST Performance Testing package

► Exchange Simulator with High-Fidelity Model Package and Business Object Library containing rules of specific exchanges

► Activity Monitor with Business &Trading package.