navigational intelligence

Nasdaq and the Case of the Missing Market Data

In late April 2017, we noticed a new string of dominoes falling at the fast, automated end of the trading spectrum: With Virtu about to gobble up KCG - not to mention additional consolidations of principal trading groups like RGM Advisors (to DRW), Timber Hill (to Two Sigma) and Chopper Trading (to DRW), among others - it seemed pretty clear that one of the next dominos to fall would be in the direct-feed market data space. The question was: To what degree? (See: "Nasdaq Under Virtu Market Data Axe," April 28, 2017) And yet, when we went back to look - via updating our Nasdaq model - this picture showed up: As Paul Harvey used to say: "...And now the rest of the story..." Obviously this trajectory is the opposite of what was expected. Better yet, in a dictionary somewhere is this chart - at least, of late - next to the words, "fairly smooth sailing" or "strong growth." Over the last few years, data products (and the growth in [...]

By | 2018-03-27T21:44:23+00:00 March 22nd, 2018|Alphacution Feed|

Alphacution Riffs Ep 1 – Technology Strategy is Business Strategy

Alphacution is proud to launch its video series, Alphacution Riffs.  Not only bringing our clients new levels of intelligence - by quantifying and modeling and benchmarking the critical interplay between technology capital and human capital - for their digital transformations, we are "eating at our own kitchen" by leveraging tools and methods of the era to help make our research - and seemingly complex topics - much easier to understand. The digital media landscape is a jungle - and we are not trying to compete in a popularity contest. However, in order to be successful, we do need to consistently identify our best audience and then consistently grab a slice of their attention. Therefore, if you find the visual interpretation of what we are doing with traditionally dry and sometimes in-the-weeds research - like the website stylings and now the video series with its combined Rock n' Roll and Silicon Valley sensibility - to be a bit different, please know that it is entirely on purpose. Sure, it would be [...]

By | 2018-04-21T15:10:30+00:00 March 14th, 2018|Alphacution Feed, Video|

The Dawn of Operational … Beta?

If you've heard of the term operational alpha, then you likely know that it is a trending concept - similar to digital transformation - that seeks to leverage the latest digital-era tools and methods to foster increasing operational agility and resilience, particularly among asset managers. (Think: Citadel, the creator of the term - and one who arguably walks this walk as well as anyone.) Moreover, if your current job is related to implementing tools and methods that are designed to foster operational alpha, then you are likely working with or for a leading, forward-thinking player that is culturally tuned to navigate real change. The problem with alpha of any kind is that you can't really have alpha unless it is measured in relation to something else. Beta. In any case, we have some illuminating news for you: It turns out that operational alpha does have something relative to it - which makes it more than a concept. It's also a number. And, that number is based on another number that [...]

By | 2018-02-28T16:29:16+00:00 November 1st, 2017|Alphacution Feed|

Man or Machine: Who Are The Real Trading Champions?

Despite dramatic changes to the fortunes of quantitative trading strategies of late, they still represent the extremes of "technology leverage" in the global markets ecosystem. This means that due to a high level of workflow automation, these types of firms generate more output - as measured by revenue per employee (RPE) - than any others in the industry. Or, so we thought... In the context of its broader research mission, Alphacution has been focused - perhaps even a little obsessed - on modeling, measuring and benchmarking the interplay between the two primary engines of productivity within the global financial services ecosystem: technology capital and human capital. The value of this research - something we call "navigational intelligence" - is to help technology buyers understand where they fit amongst the constellation of peers and competitors, and for solution sellers to understand the needs and spending patterns of their clients. Until recently, high frequency trading and market-making operations - like those found at Virtu Financial and its newly acquired KCG Holdings - [...]

By | 2018-02-28T16:31:28+00:00 September 20th, 2017|Alphacution Feed|

Feed Your Cognitive Taste Buds: Collaboration Will Expedite Validation

As you gorge yourself on the latest curated fire hose of content today, this post may waft onto your cognitive taste buds like a shameless plug. Fine. Like a herd of squirrels, here comes the next and the next and the next tweet anyways, just right for your canine attention span. It's all good, and no hard feelings. We will aspire to catch you with the next tidbit or on a different modality... But for those of you who care to pause and consider the deeper value here  - I offer this reminder and some inside baseball for your own creative purposes: In parallel with the mission to deliver uncommon and data-driven intelligence for the financial services (FSI) ecosystem, Alphacution was also founded to eat at its own kitchen - which is a practice that we have discovered over many years is rarely the case with research and advisory platforms. (By the way, not pointing any fingers - its not necessarily anyone's fault. Convention is a gravitational bitch.) Translation: If [...]

By | 2018-02-28T16:35:18+00:00 October 14th, 2016|Alphacution Feed, News, Press|

Navigational FinTelligence: The Method and the Madness

This post includes a metaphor, an anecdote and a vision.  Ready?  Here's the sketch: A magician - who was prone to playing the "long ball" - sought to develop the world's greatest card trick. True to form, the magician asks a volunteer to pick a card, sign his name to it, and put it back in the deck. The magician then claims to transport that card into a tree. When the tree was cut down immediately thereafter, the autographed playing card was found, encased in glass, nestled within the heart of the trunk. A weary traveler - and avid puzzle-builder - walks into the Louvre gift shop in 2002 and purchases one of the world's largest jigsaw puzzles. It was 8,000 pieces, when assembled, depicting an elaborate fresco created by Luca Giordano during the Habsburg Dynasty (known as "trigolo degli Asburgo"). The puzzle sat in its box until 2007 when - over the course of the next year - the puzzle was assembled on two adjoining sheets of 4' by 8' [...]

By | 2018-02-28T16:35:57+00:00 September 23rd, 2016|Alphacution Feed|

Quantifying #Transformation | Numerix Video Blog Series

Understanding FinTech #Transformation: In this SECOND of a five part video blog series Jim Jockle, CMO of Numerix sits down with Paul Rowady, Director of Research at Alphacution to discuss the concept of #Transformation. Jim and Paul provide their perspectives on the latest examples of transformation they’re observing in the financial services industry specifically around the cross section of IT spending trends, software vs hardware investment, human capital expense, IT infrastructure, data management and risk analytics innovations. The five segments cover: Defining #Transformation within Financial Services Quantifying #Transformation The Cost of #Transformation #Transformation and TCO: Hewlett Packard Enterprise & Deutsche Bank Case Study Investing in #Transformation: What’s the ROI? Video 2: Quantifying #Transformation Jim: Hi welcome to the Numerix Video Blog I’m your host Jim Jockle. Joining me today continuing our conversation “Quantifying Transformation” Paul Rowady, director of research at Alphacution. Paul, welcome back. Paul: Thank you Jim. Jim: We started the conversation as it relates to the definitions of transformations and some of the work you’re been doing – [...]

By | 2018-02-28T16:37:12+00:00 April 26th, 2016|Alphacution Feed|