Exchanges Build Data Franchises

NASDAQ OMX acquires machine-readable news company RapiData.



Market data products represent a burgeoning line of business for exchanges. In addition to selling their own data, they are pursuing distribution deals with other exchanges to make their data available to each other’s customers.



With its acquisition of the business of RapiData, NASDAQ OMS is in the business of offering machine-readable news which is being consumed by a greater variety of users for a growing number of reasons.



RapiData, a provider of machine-readable economic news to trading firms and financial institutions, enables NASDAQ OMX to deliver U.S. government and other economic news directly from the source to customers interested in receiving information in an electronic feed, Hyndman said.



RapiData delivers U.S. government and other economic indicators to a variety of market participants, giving them instant access to events that are incorporated into algorithmic trading systems.



“Some customers that trade algorithmically are looking for machine-readable products which their models can trade off of,” Brian Hyndman, senior vice president of global data products at NASDAQ OMX, told Markets Media. “ We’re going to leverage our network engineering to create a low-latency product with rich content, with the possibility of expanding it later on to include social media or other content.”



Potential beneficiaries include trading firms that incorporate macroeconomic news into their trading algorithms, conventional traders who use machine-readable news to manage risk, and institutional investors who seek long-range strategies, liquidity opportunities and target investments.



The addition of RapiData is part of NASDAQ’s strategy to give customers more efficient access to the tools needed to compete in the marketplace, said Hyndman.



Earlier this year, it launched UltraFeed, a highly-efficient data feed that aggregates all North American equity, options, futures and index data feeds.



UltraFeed is a customizable data feed that will initially carry normalized message formats by asset class, including equities, options, futures, indexes and mutual funds.



“UltraFeed offers clients an easier way to process data from NASDAQ and numerous other North American exchanges,” Hyndman said. “Because it is built using INET technologies, clients will be able to receive market data in a highly efficient and more cost effective manner.”



UltraFeed will first be delivered to QUODD Financial Information Services, which will provide UltraFeed to its approximately 550 downstream client firms who, in turn, feed thousands of end-users. QUODD customers will benefit from UltraFeed’s customizable messaging standard for equity, options, futures and index data.



As part of the UltraFeed initiative, QUODD Financial Information Services will enhance its market data cache technology. With the implementation of UltraFeed as QUODD’s new data source in 2012, QUODD will expand its product offering to include NASDAQ TotalView for clients wishing to access depth of book data.