The truth is that the financial trading model, in the last couple of decades has shifted significantly. Previously, human traders had traditionally called and signaled across huge open pits. However, these days, sophisticated Electronic Execution Platforms have made things seem easier. Trades are executed almost instantly in today’s virtual market. Also has evolved technological requirements. Hence, it can be stated that infrastructure and technology do contribute to the success of such companies.
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Between the years 2000 and 2009 saw considerable growth in trading firms and the popularity of CryptoCurrency. Several startup companies emerged and huge capital was invested in cutting-edge technology with the objective to gain a foothold in the industry. On-premise data centers and densely populated offices saw the introduction of high-powered trading platforms. This helped increase cooling and power needs while having a significant impact on MEP. It also helped met infrastructure requirements in today’s demanding work environment.
Things to consider
1. There was needed Supplemental cooling equipment in large numbers to cool sufficiently increasing the IT load. Also, it was needed to accommodate after-hours trading.
2. Reallocation of space was necessary to accommodate uninterruptible, centralized, power systems, expansive telecommunication pathways, and high-density data cabinets.
3. To support monitor clusters and personal computers, physical support was provided by workstation furniture. It also offered enhanced flexibility, thereby meeting each trader’s ergonomic needs.
Although such concerns are considered to be vital in the electronic trading workplace, new challenges do lie ahead that need to be tackled. For this, Financial Investments will be required.
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Workplace surplus and plateau effect
Electronic trading has grown to some extent. However, in the last 4-5 years, it has been witnessing stagnation because of low-interest rates and recession. However, how financial organizations can manage their risk is being changed by government regulations like Dodd-Frank Wall Street Reform as well as Consumer Protection Act. Also have declined profit margins, especially on trading transactions due to a smaller investor base and increased competition. Hence, to be profitable, organizations have been investing in the latest technology and Tax Management, but with a highly conservative approach.
The economy in recent times has witnessed a slowdown. A good number of trading firms saw huge reductions in staff. But now they are having a surplus of underutilized infrastructure and real estate. These require ongoing maintenance, thus leading to excess operational expenses and Financial Investments. Hence, to reduce such expenses, the space can be repurposed in a partial sub-lease agreement. It can also be relocated to another new location. But each option comes with its own pros and cons.
A partial sublease agreement helps prevent staff and resource relocation in huge numbers. However, security risks are very associated if there are multiple tenants sharing data center space on-premise along with common telecommunication pathways. Office relocation enhances flexibility while offering a secure work environment. It also helps with Tax Management issues. However, it is necessary to plan space layout and re-evaluate cooling and power needs, available amenities, and utilities by different sites. Also should be developed proper IT migration plan. Since each option comes with its own complexities, there will be desired significant coordination and expertise to know what is deemed fit for the company.
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Technology and Electronic Execution Platforms
High-tech trading firms tend to face more challenges. But still, technology is considered to be a critical component driving this industry. Organizations can respond effectively and execute trades in sensitive time parameters with enhanced data transmission speed. Some firms have co-located their own servers close to exchange servers for reducing latency. LAN rooms have been over-provisioned with improved bandwidth ability to accommodate easily trade volume-based sharp spikes. Cryptocurrency is also favored.
Source: Cosmo Politian