Brazil's Link Selects Progress Apama Algo Trading Platform

Progress Apama has signed up Link Investimentos, its 18^th client in Brazil in just 18 months, for its algorithmic trading platform. The deal underscores Progress Apama's assertion that the local electronic trading market is booming as investment banks and brokerages adopt next-generation trading technologies to enable algorithmic and high-frequency trading strategies.

Link Investimentos is an independent brokerage set up in 1998. It plans to use the Progress Apama platform to provide clients with innovative technologies and strategies using a complex event processing (CEP) environment similar to that already established in North America and Europe.

Link selected the Progress Apama algo trading platform after a lengthy evaluation period. The firm is now helping buyside clients develop alpha seeking, low latency, customised strategies for high-frequency trading on the BM&F Bovespa. The Sao Paulo-based exchange was created through the merger of Brazil’s futures and equities exchanges, BM&F and Bovespa, last year.

According to Dan Hubscher, senior product marketing manager for capital markets at Progress Apama parent Progress Software, “Investment banks and brokerages in Brazil usually opt for one of three ways to join the electronic trading market. They take the homegrown route, build on packaged algos such as those from Robo Trader, or they buy a trading platform, often Apama. We have been in the Brazilian market since mid-2008 and now have 18 clients, but more CEP specialists and software houses are beginning to dip their toes in the water.”

Link went live on the Apama trading platform with a simple strategy built by Progress late last year. Its team of 50 dedicated developers has since built customised trading strategies with a number of clients.

Daniel Mendonça de Barros, CEO of Link, says: “Offering this advanced algo capability to Brazilian investors gives our company a competitive advantage and provides individual investors with the best technology solutions. The deployment of the Progress Apama platform means we can further increase our share of the equity market and attract new investors.”

As well as the trading platform, Link is using the Apama event modeller, a graphical development environment that allows its traders to develop and deploy algo strategies quickly in response to clients’ requirements.

The brokerage is also planning to take advantage of the Apama platform’s back-test capability, which supports back-testing of custom strategies in real time using data from domestic and international equities and futures markets. While this can be done with data provided by tick databases, Hubscher points out that this is not an easy task and that it is better supported by a platform such as Apama.

Link has yet to go live with back-testing as it will take time to source and integrate data from exchanges around the world. But when it does, back-testing is expected to be a differentiator for the brokerage.

Says Hubscher: “By using Apama to back-test clients’ trading strategies, Link will take a huge burden off their shoulders. Link will provide the technology that creates a competitive edge as clients will be able to see how strategies could behave, which is quite unusual.”

In its constant drive to harness innovative trading technologies, Link already offers co-location and proximity co-location services, and is expected to use emerging elements such as back-testing to facilitate additional types of trading, such as cross-border trading.

“At the moment, this is all about algo trading and executing strategies for the buy side,” says Hubscher, noting Finabank, Alpes and Banco Fator among other Apama users in Brazil. “But when the market is saturated and everyone has algo trading tools there will be change.

Looking forward, he expects the emergence of customised risk management systems that will go hand-in-hand with algo trading systems, a move to cross asset trading and more granular market surveillance based on technologies such as real-time pattern detection.