Understanding the Embedded Finance Landscape

How TickTrader Trading Platform Helps to Solve Liquidity Challenges

by FM
Disclaimer
  • Explore new liquidity management controls in the TickTrader Trading Platform package.
Soft-FX
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One of the most important issues that brokers are constantly addressing is liquidity flow and its management. Without quality liquidity, it is impossible for a trading platform to operate successfully, and this is a fact, so among the software tools that end up in the hands of administrators must be those that facilitate liquidity management in one way or another, whether they are simply pre-installed technical connectors or more sophisticated tools.

It's the latter category that we spoke about with Soft-FX, who have included advanced liquidity management controls in their TickTrader Trading Platform delivery package.

Pre-established Connectors to FX, Crypto and Equities liquidity providers

“This may not seem like a big deal at first glance, but it is our firm belief that we should provide clients with technical connectors to liquidity providers to make it as easy and fast as possible to deliver liquidity on the platform at launch,” the developers argue.

The TickTrader Trading Platform liquidity aggregation package currently boasts 30+ connectors to major FX providers, 18 connectors to crypto LPs and 5 connectors to Equities market data and trading providers. Moreover, according to Soft-FX representatives, if a client does not find the desired connector, it will be created on demand.

Order Internalization

"With the TickTrader Trading Platform, our client gets access to a powerful matching engine that, with a large client base, can work around external liquidity providers altogether," Soft-FX representatives state.

According to devs, the matching engine in question enables clients to generate internal liquidity and act both as price-takers and price-givers: “This means that in addition to the liquidity you receive from external suppliers, you will be able to add your clients' orders to the market depth. This can significantly reduce the expenses on the liquidity providers' commissions.”

Hybrid Model

A hybrid model in the case of TickTrader refers to an order processing system that combines the advantages of the A-Book and B-book models. This is the description Soft-FX provides: “In general terms, combining A-Book and B-Book methods only means that the orders of well-performing clients are sent to external liquidity providers, while the orders of those whose statistics look worse remain inside the platform.”

However, according to the developers, such a risk management system can also involve certain hazards, especially when liquidity providers are exposed to so-called “toxic flows” from performing clients. Soft-FX has consequently added a trading multiplier system to the standard layout: “With this multiplier system, each trading account on the platform can be assigned a trading multiplier. The value of this multiplier determines the percentage of the requested trading volume that goes to the external market. By combining this method with quality liquidity aggregation and thorough risk management procedures, you can get to the point where you are earning along with profitable clients and not losing assets on them or unnecessarily frustrating your providers.”

Quote Filters Subsystem

According to Soft-FX, this set of filters is the result of many years of research into quote flow behavior and how to manage it: “The Quotes Filters subsystem consists of a sequence of filters that process raw quotes from different sources into aggregated Level 2 used for orders allocation, execution, and trading system feeding; subsystems can be configured, monitored, and even extended on demand.”

According to the concept, this set of filters allows processing the L2s received from external liquidity providers according to the parameters that have been set in accordance with certain business objectives. We asked the developers to describe the operating principle of one of the filters included in the set.

“Let’s consider the Shift filter. With it, it is possible to balance positions on clearing accounts by adjusting Ask and Bid prices if necessary. The filter processes the data for each liquidity provider that affects the feed formation and calculates the total average weighted position (AWP). When the quotations of banks begin to exceed the maximum value set for AWP, the filter comes into action and processes prices set by these providers. As a result, the risk of Stop Out is eliminated, because the quotes from banks are balanced in the feed.”

For more information, you can refer to a detailed primer which can be found on the Soft-FX website.

Logging and Reporting

To many, this area does not look very exciting, but Soft-FX encourages you not to look past the possibilities of documenting the order lifecycle. “With our software, it is possible to register in detail the path of a client order with a time record of each stage, including logging the interaction with external liquidity providers. This feature may help save resources and time in resolving disputes with both customers and providers.”

Soft-FX stresses that many types of reports can be created from the logging system, including reports on execution quality or quantity and trading server reports.

Real-time Monitoring and Support

“It goes without saying that every effort is made in our system to ensure that the collection and processing of liquidity is as failsafe and autonomous as possible,” the devs stress. “At the same time, we realize that it is impossible to forecast every possible scenario, so we have implemented a special 24/7 monitoring service with SMS or Telegram alerts.”

TickTrader Trading Platform is ready for brokerages and digital trading businesses to integrate. Soft-FX representatives will elaborate on the advantages of their trading platform for administrators and business owners. In the meantime, you can learn more about the solution and ask all your questions to the developers and consultants here:

https://www.soft-fx.com

About Soft-FX

Soft-FX is a fintech development company that provides software and support services to both the financial services industry and digital asset platforms. Since 2005, Soft-FX has established a multitude of long-term partnerships with Forex and digital currency brokers, blockchain platforms, dealers, banks, and funds.

As a provider of cutting-edge technological solutions to the FX and digital currencies industry for over a decade, our highly experienced teams of IT, Legal and Financial professionals ensure all clients have the most comprehensive support during their business development journeys.

One of the most important issues that brokers are constantly addressing is liquidity flow and its management. Without quality liquidity, it is impossible for a trading platform to operate successfully, and this is a fact, so among the software tools that end up in the hands of administrators must be those that facilitate liquidity management in one way or another, whether they are simply pre-installed technical connectors or more sophisticated tools.

It's the latter category that we spoke about with Soft-FX, who have included advanced liquidity management controls in their TickTrader Trading Platform delivery package.

Pre-established Connectors to FX, Crypto and Equities liquidity providers

“This may not seem like a big deal at first glance, but it is our firm belief that we should provide clients with technical connectors to liquidity providers to make it as easy and fast as possible to deliver liquidity on the platform at launch,” the developers argue.

The TickTrader Trading Platform liquidity aggregation package currently boasts 30+ connectors to major FX providers, 18 connectors to crypto LPs and 5 connectors to Equities market data and trading providers. Moreover, according to Soft-FX representatives, if a client does not find the desired connector, it will be created on demand.

Order Internalization

"With the TickTrader Trading Platform, our client gets access to a powerful matching engine that, with a large client base, can work around external liquidity providers altogether," Soft-FX representatives state.

According to devs, the matching engine in question enables clients to generate internal liquidity and act both as price-takers and price-givers: “This means that in addition to the liquidity you receive from external suppliers, you will be able to add your clients' orders to the market depth. This can significantly reduce the expenses on the liquidity providers' commissions.”

Hybrid Model

A hybrid model in the case of TickTrader refers to an order processing system that combines the advantages of the A-Book and B-book models. This is the description Soft-FX provides: “In general terms, combining A-Book and B-Book methods only means that the orders of well-performing clients are sent to external liquidity providers, while the orders of those whose statistics look worse remain inside the platform.”

However, according to the developers, such a risk management system can also involve certain hazards, especially when liquidity providers are exposed to so-called “toxic flows” from performing clients. Soft-FX has consequently added a trading multiplier system to the standard layout: “With this multiplier system, each trading account on the platform can be assigned a trading multiplier. The value of this multiplier determines the percentage of the requested trading volume that goes to the external market. By combining this method with quality liquidity aggregation and thorough risk management procedures, you can get to the point where you are earning along with profitable clients and not losing assets on them or unnecessarily frustrating your providers.”

Quote Filters Subsystem

According to Soft-FX, this set of filters is the result of many years of research into quote flow behavior and how to manage it: “The Quotes Filters subsystem consists of a sequence of filters that process raw quotes from different sources into aggregated Level 2 used for orders allocation, execution, and trading system feeding; subsystems can be configured, monitored, and even extended on demand.”

According to the concept, this set of filters allows processing the L2s received from external liquidity providers according to the parameters that have been set in accordance with certain business objectives. We asked the developers to describe the operating principle of one of the filters included in the set.

“Let’s consider the Shift filter. With it, it is possible to balance positions on clearing accounts by adjusting Ask and Bid prices if necessary. The filter processes the data for each liquidity provider that affects the feed formation and calculates the total average weighted position (AWP). When the quotations of banks begin to exceed the maximum value set for AWP, the filter comes into action and processes prices set by these providers. As a result, the risk of Stop Out is eliminated, because the quotes from banks are balanced in the feed.”

For more information, you can refer to a detailed primer which can be found on the Soft-FX website.

Logging and Reporting

To many, this area does not look very exciting, but Soft-FX encourages you not to look past the possibilities of documenting the order lifecycle. “With our software, it is possible to register in detail the path of a client order with a time record of each stage, including logging the interaction with external liquidity providers. This feature may help save resources and time in resolving disputes with both customers and providers.”

Soft-FX stresses that many types of reports can be created from the logging system, including reports on execution quality or quantity and trading server reports.

Real-time Monitoring and Support

“It goes without saying that every effort is made in our system to ensure that the collection and processing of liquidity is as failsafe and autonomous as possible,” the devs stress. “At the same time, we realize that it is impossible to forecast every possible scenario, so we have implemented a special 24/7 monitoring service with SMS or Telegram alerts.”

TickTrader Trading Platform is ready for brokerages and digital trading businesses to integrate. Soft-FX representatives will elaborate on the advantages of their trading platform for administrators and business owners. In the meantime, you can learn more about the solution and ask all your questions to the developers and consultants here:

https://www.soft-fx.com

About Soft-FX

Soft-FX is a fintech development company that provides software and support services to both the financial services industry and digital asset platforms. Since 2005, Soft-FX has established a multitude of long-term partnerships with Forex and digital currency brokers, blockchain platforms, dealers, banks, and funds.

As a provider of cutting-edge technological solutions to the FX and digital currencies industry for over a decade, our highly experienced teams of IT, Legal and Financial professionals ensure all clients have the most comprehensive support during their business development journeys.

FM
Disclaimer
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