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The power of APIs in buy-side trading

Brian Mullane
Brian Mullane
Director, Buy-side Execution, Refinitiv

APIs play a critical role in buy-side trading strategies as market participants demand more flexibility and customisation in their workflows. How does the Refinitiv suite of Eikon, FX, Elektron and REDI APIs – supported by our growing developer community – help traders to get the most out of their data?

  1. The use of APIs in buy-side trading strategies is helping to deliver highly automated and fully customised solutions to support complex workflows.
  2. The Refinitiv suite of Eikon, FX, Elektron and REDI APIs can be combined, customised and integrated with others to create a bespoke solution.
  3. The Refinitiv developer community has the tools, sample code, learning materials and Q&A forums to help manage APIs in buy-side trading.

As the buy-side becomes more sophisticated, traders are steadily moving away from broker-owned platforms towards modular, broker-neutral solutions.

“Out-of-the-box” trading systems are falling out of favour as traders stitch together disparate systems and workflows to support their specific objectives.

This enables them to reduce costs and gain efficiencies by focusing their spending only on the data and services they need to power their strategies.

On top of this, there’s a trend towards automated solutions that free traders to focus their time where they can add the greatest value.

Buy-side trading strategies

APIs are a critical part of the solution. Offering unparalleled flexibility and customisation options, open platforms, such as Refinitiv’s Elektron Data Platform, enable traders to choose services they want without being obligated to pay for those they don’t.

They can then connect to the markets with a broker-neutral trading API (Refinitiv’s REDI Execution Management System API, for example).

In our experience, from building trading software over two decades, this rapidly developing trend is directly correlated to the increasing sophistication of buy-side trading strategies.

The recent increase in demand for trading solutions delivered via APIs, we believe, is driven by the need for solutions that support highly complex and intricate workflows, where “normal” trading systems fall short.

Hedge fund example

Our hypothetical example focuses on a start-up hedge fund in the tech sector, which models its strategy on statistical analysis of historical time series trade data. The fund is looking to optimise its technology spend, while adopting tools that will help to build bespoke workflows.

A typical API use case. The power of APIs in buy-side trading

It downloaded the Eikon Data API, along with its companion Python library, in order to access the required data and to customise its applications through the use of the API.

After writing code, the data automatically powers-up desktop applications and is formatted to the hedge fund’s needs in order to power the predictive model.

To complete its automated end-to-end solution, the fund incorporated the REDI trading API to implement its trading strategies, whether trading equities, futures, options and pairs, viewing positions, or monitoring orders and executions.

Other common use of API solutions to support complex workflows include:

  • A strategy that requires a mechanism to trade without using a click trading application.
  • A portfolio management tool that requires pricing information and generates trades.
  • A pairs trading strategy that integrates with analytics platforms outside the trading application.
  • A back-office workflow which customises code for reporting and allocating trades.

A robust developer community

An increasingly engaged API developer community is forming, offering opportunities to ask and answer questions, get sample code and discuss specific technical issues.

There is also an expanding online library of tutorials and overview pages. At Refinitiv, we’re building our service portal to help clients to take full advantage of the Refinitiv Developer Community.

As the buy-side deploys increasingly complex strategies, platforms that are more precisely tailored will be needed to help traders solve major workflow issues.

Highly automated and fully customised trading solutions are the future of trading, and Refinitiv is working hard to stay ahead of the curve.

Our suite of Eikon, FX, Elektron and REDI APIs can be combined, customised and integrated with others to create a bespoke solution for clients to gather and analyse news and data, model strategies and conduct trades.

For further information, please sign up for the Refinitiv Developer Community.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Refinitiv, or any of its respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

© Refinitiv 2019. All Rights Reserved. REDI Global Technologies LLC is a member of FINRA/SIPC. REDI Technologies Ltd. is authorised and regulated by the UK Financial Conduct Authority. This communication is only intended for institutional customers and eligible counterparties as defined by the respective regulators/authorities. REDI services and related services are not available in all jurisdictions.