ECHO Platform Use Case

Automated Market Making for Custom Futures Spreads and Calendar Spreads with ECHO and CTS/T4 Integration

Objective

Our team was tasked with programming and automating various relative-value market-making strategies for a proprietary trading firm. These strategies needed to execute across intricate futures spreads and calendar spreads in various futures and futures options markets.

A critical requirement was achieving low latency, with single-digit microsecond order updating, while ensuring that all working orders remained below exchange-imposed iLink transaction limits. Additionally, we needed to establish a robust API connection to the CTS/T4 front-end platform while ensuring efficient risk management and seamless order execution. To provide full oversight and control, we developed an intuitive user interface to manage the trading system.

Project Requirements

  • Single-digit microsecond order updating
  • Exchange iLink transaction limit compliance
  • CTS/T4 API integration
  • Automated market-making strategies
  • Risk management and order execution
  • Intuitive user interface

Solution

Harnessing the full capabilities of the ECHO platform, we crafted a bespoke solution that seamlessly integrated with the CTS/T4 front-end platform and their API. Our team utilized ECHO's extensive feature set to automate the entire spectrum of market-making strategies employed while prioritizing risk management and user-friendly control.

Low Latency, Microsecond Order Updating

Leveraging our full backend capabilities of ECHO, we created a powerful trading solution for managing vast amounts of order update instructions across hundreds (potentially thousands) of working orders. All order updates were kept within exchange imposed iLink transaction limits quota, given intelligent design add-ons we built into the trading system.

Market Risk Management

Effective risk management was at the core of our implementation. This included automated hedging for new positions, dynamic order adjustments based on market conditions, and provision for manual intervention to allow traders flexibility in real-time adjustments.

Technology Risk Management

We implemented robust safeguards and a trading technology risk management messaging layer to manage technology-related risks effectively. This included continuous connectivity monitoring of the API connection to CTS/T4, automatic order handling in cases of disruptions, text/email alerting, and compliance and order management tools to adhere to Exchange-imposed messaging quotas and regulatory mandates.

User-Friendly Interface

Our solution included a customized user interface designed to enhance the user experience. It featured tailored UI design for intuitive trade oversight, scalability and flexibility to cater to changing trading demands, program start/stop commands on demand, and easy order management.

Technology Stack

The solution leveraged ECHO's advanced trade engine features alongside a user-friendly interface, facilitating efficient trade execution, real-time risk monitoring, and seamless order management with CTS/T4 integration.

ECHO Platform
CTS/T4 API
iLink Protocol
Custom UI
Risk Management
Order Management
Real-time Monitoring
Automated Hedging

"The ECHO platform delivered microsecond precision and seamless CTS/T4 integration that empowered our complex futures spread trading strategies with unmatched performance and reliability."

Results

The seamless integration of ECHO with CTS/T4 culminated in the successful creation and deployment of a comprehensive automated trading application.

Platform Performance

This solution empowered our client to execute complex futures spreads with precision, automate risk management, and optimize market making performance.

Microsecond Execution
Achieved single-digit microsecond order updating while maintaining compliance with exchange iLink transaction limits.
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Critical for spread trading
CTS/T4 Integration
Seamless API connectivity with continuous monitoring and automatic disruption handling capabilities.
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Reliable platform connection
Automated Risk Management
Comprehensive risk controls with automated hedging, dynamic adjustments, and manual intervention capabilities.
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Enhanced position protection
Scalable Operations
Comprehensive toolset positioned our client to significantly scale up their trading operation with confidence.
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Operational expansion capability

Key Business Outcomes

Leveraging ECHO's advanced trade engine features alongside a user-friendly interface, our solution facilitated efficient trade execution, real-time risk monitoring, and seamless order management.

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Complex Futures Spreads Execution: Enabled precise execution across intricate futures spreads and calendar spreads with automated market-making strategies.
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Comprehensive Risk Controls: Implemented automated hedging, dynamic order adjustments, and technology risk management with regulatory compliance.
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Scalable Trading Infrastructure: Built on ECHO Platform foundations with CTS/T4 integration ensuring future expansion capabilities and operational flexibility.
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Intuitive Operations Management: User-friendly interface with tailored design for trade oversight, program control, and seamless order management.

Project Summary

Our comprehensive toolset positioned our client to significantly scale up their trading operation. This provided our client with the means to trade complex futures spreads with precision while minimizing risk exposure through automated market-making strategies and seamless CTS/T4 integration.

Interested in a similar trading solution? Our team can build custom high-performance trading applications tailored to your specific requirements.

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