Kairos Asset Management Taps StreamBase For Algo Trading

Brazilian hedge fund Kairos Asset Management has implemented StreamBase Systems' complex event processing (CEP) software as the basis of its new algorithmic trading system and is already trading certain strategies for equities, foreign exchange and local futures markets. Further strategies are due to be migrated from its existing system, which uses Microsoft Excel spreadsheets linked to SunGard/GL Trade's Automate functionality.

“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 don't need to rebuild the whole solution [with Streambase], which allows us to be ahead of the market," adds Jacob. 

Kairos's new trading system - implemented on Red Hat Linux - receives data direct from the local stock and futures exchange - BM&F Bovespa - and from Reuters via its Reuters Market Data System. Latency from the local markets is less than 10 milliseconds, achieved via co-location.

Jacob says that Kairos is also planning to take data from NYSE Euronext and is exploring proximity options for that endeavor. The hedge fund trades in the local markets, US markets and also US versus Mexican markets.

“Kairos’s selection of StreamBase validates our white-box approach of providing developers with a high-speed CEP platform, combined with connectivity and visualisation options necessary to build fully customisable trading systems based on an underlying CEP architecture,” says Mark Palmer, CEO of StreamBase.

Based in São Paulo, Kairos was founded in 2003 by by proprietary traders from several major Brazilian financial institutions, and employes both quantitative and qualitative investment strategies.