This week StreamBase cleared another hurdle in the race to take CEP into the mainstream by announcing the first application of its technology to facilitate high-speed trading between assets traded in Brazil and overseas (coverage by Jonathan Wheatley from the Financial Times, São Paulo). Kairos is an excellent case study about three fundamental motivations for CEP technology: speed to get into market, speed to execute event-based systems, and speed of application evolution.
The Brazilian trading market illustrates why time-to-market is so important in the capital markets. As the Financial Times reports, "The BM&FBovesp was formed last year by the merger of the São Paulo futures and stock exchanges - and is currently the fastest-growing exchange in the world according to Mondo Visione, which tracks global exchanges. Its market capitalisation grew by 17.6 per cent in September and by 65.7 per cent over the past year." Kairos believes that algorithmic trading volume on BM&FBovesp will have grown fourfold by the end of the year. That kind of change in market structure presents opportunity to the firms who seize it first.
Kairos' use of event-based technology helped them be the first firm to trade across borders between Brazil and overseas. "With the [event feed] adapters in place, we just connect to the market data and it is easy to implement our strategies in the software - that's one of the main reasons we chose StreamBase." said Gustavo Jacob, CTO at Kairos (from Kairos Bows StreamBase for Algo Data by Max Bowie from Inside Market Data). In an interview I attended Gustavo also spoke of evolving the system every single day as trading opportunities emerged.
StreamBase was founded on the idea of targeting a 50X improvement in performance over traditional, transactional database technologies. But comparisons between CEP and transactional database technology stopped years ago and now we're more often compared to custom C++ or Java code. Kairos said that their new CEP-based system is 100 milliseconds faster than their previous built-for-purpose application and that it can be changed rapidly—two achievements that are "not possible using standard electronic systems."
Finally, in the A-Team article Kairos Asset Management Taps StreamBase for Algo Trading, Alberto Araújo, the managing director of Kairos, explained their evaluation process and findings:
“Our evaluation process started in mid-2008, when we started looking at the leading CEP companies. Our developers downloaded StreamBase and got to work developing a new algo trading system and were amazed at how easy it was to build applications. After a few months of testing, StreamBase was the clear winner,” says Alberto Araujo, COO at Kairos. As well as evaluating StreamBase, Kairos also considered CEP technology from Progress/Apama and Coral8 (since acquired by Aleri). StreamBase won, says Kairos CIO Gustavo Jacob, because of the ease and speed with which new trading strategies can be created, typically in around two weeks. Specific functionality that gave StreamBase an edge was its visual approach to event workflow and debugging, unit testing and profiling capabilities, and existing connectivity."
We've had an amazing year of competitive public endorsements, including CME Group, PhaseCapital, RBC, ConvergEx, and BlueCrest, and now Kairos. We believe passionately that we have the best CEP product in the industry, and actively encourage anyone to try it to see for themselves.
Performance in three dimensions—speed to get into market, speed to execute event-bases systems, and speed of application evolution—are why CEP entrepreneurs are having fun, growing, and breaking down new business barriers.