Faced with macroeconomic shifts, uncertain forecasting, and frequent policy changes, the electronic trading industry is challenged to keep up. New developments like Bitcoin ETFs further exemplify change, and the industry is still responding to reverberations from the meme stock saga. While electronic trading platforms captured 44% of buy-side U.S. equities order flow in 2023 (i), consolidations and financial constraints mean fewer traders are burdened with higher workloads.
I lead electronic trading at Clear Street, a diversified financial services firm replacing the legacy infrastructure used across capital markets. At our core, Clear Street is a technology firm. We're pioneering a technology-first experience for prime brokerage utilizing a platform built on modern infrastructure rather than mainframes from the 1980s and other out-of-date technology reliant on batch processing.
Clear Street offers the most flexible infrastructure I’ve ever seen during my two-decade experience on Wall Street. Our state-of-the-art, cloud-native technology has enabled us to leapfrog our competitors, who are restrained by the legacy technologies they’ve had to absorb over the years.
In electronic trading, this means we stand up key processes with more efficiency and effectiveness than many other brokers in our space, yielding a more complete and cohesive solution. I’m proud to say that we have moved mountains in the short time that I’ve been at Clear Street.
My immediate goals were to expand our execution capabilities across new client personas and driving functionality and resiliency across our platform. We have achieved both core objectives with unwavering support from our partners across the firm.
As a result, we have fortified our messaging gateways and expanded our capacity, allowing us to facilitate complex client requests easily. We’ve also driven strategic alignment to lower costs on the backend, allowing us to pass those savings directly to our clients.
Our team mentality is critical to our success here at Clear Street. We are tremendously dedicated to building a best-in-class electronic organization, drawing upon years of experience building, servicing, and aligning client needs across equity, ultra-low latency, algorithmic, direct market access, and options execution capabilities.
When selecting a broker for electronic trading, their platforms' ease of use, reliability, and high-quality technical support garner nearly three-fourths of buy-side preferences (i). Clear Street’s electronic team incorporates our trade support and client coverage teams for an inclusive and collaborative environment that drives crucial strategic integration. We have assembled some of the best subject-matter experts in the industry who are extraordinarily motivated and focused on aligning our objectives with our clients’ - a novel approach in the landscape of larger multinational firms.
Our clients can trade from 4 a.m. to 8 p.m. with the reassurance that they are seamlessly connected to coverage and support teams that follow the sun and understand their objectives. We operate cohesively across our trade support, clearing, settlement, and core infrastructure teams because we have built integrated technology to cross-communicate more effectively.
My team constantly focuses on performance and cost within our electronic stack. This leads to strategic pivots across network connectivity and internal scalability components that offer our clients consolidation efficiencies and cost savings. It also lends to more efficient order management and risk monitoring, aligning with our in-house centralization advantages.
One example of this advantage is our algorithmic trading offering. Algorithms inherently use factor modeling to maximize trading objectives and adjust to real-time movements in the market. Demand for algo customization continues to grow in popularity across our clients as they refine and tune their decision processes and, therefore, need specialized tools to optimize performance.
Increased connectivity and fragmentation across our market centers and liquidity destinations require more robust infrastructure and routing capabilities than ever before. As Best Execution requirements continue to rise, broker-dealers must stay ahead of the game by investing in technology and innovating across their stack - and we have absolutely done that here at Clear Street.
The electronic execution team partners with our best-in-class in-house technologists and engineers to build robust solutions for the most sophisticated clientele. We’re utilizing the most advanced technology in the cloud to scale across our core clearing and settlement businesses.
As Clear Street expands its products and services, we’ll grow our electronic offering beyond our current equity and options capabilities to include futures and international assets. We’re in the market with solutions in Canada and taking steps to establish operations outside of the Americas for both prime brokerage and futures.
In July 2023, Clear Street acquired React Consulting Services and its proprietary, cloud-native futures clearing platform, BASIS. Once the platform is fully integrated, we’ll service clients in U.S. equities, options, fixed-income, and futures. We are also very focused on expanding our retail offering to streamline systems, lower latency, and improve EQ markouts.
When our services grow, our team will grow, too. We just welcomed a key hire to our client-facing coverage team and will be looking to expand our sales effort in the second half of this year. We have strong synergies across our prime, derivatives, futures, and clearing teams, and we’re excited to add a dedicated electronic sales specialist.
All the while, we’ll continue to leverage the latest technologies and techniques to optimize performance and transaction cost analysis for our clients and develop new and innovative ways to provide cohesive service through a differentiated product offering. Contact us to get started.
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Products and services are offered by Clear Street LLC as a Broker Dealer member FINRA and SIPC and a Futures Commission Merchant registered with the CFTC and member of NFA. Additional information about Clear Street is available on FINRA BrokerCheck, including its Customer Relationship Summary and NFA BASIC | NFA (futures.org).
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