Frank, please remind us about the growing range and types of clients that Lucera is now providing products and services for.
We have a wide range of clients – small trading firms, IDB’s, non-bank market makers all the way to tier-1 banks – almost all of which are located globally. Our products are built in a modular fashion so a client can perhaps begin with a hosting deal using Compute™, then realize they need connectivity via Connect™ and then our API normalization service and finally they may see they need to use one of our full trading platform products LumeFX™ or LumeMarkets™. So, we find that our clients grow organically. As their business and technology needs grow, they find that Lucera can offer components that accelerate that growth.
The trading infrastructure requirements of FX market participants has been evolving over the past few years. In what ways has this played into Lucera’s business model and the solutions you now provide?
The technology and infrastructure requirements have certainly changed in the last few years. As the electronification of the FX market has continued, the need for better
and more reliable infrastructure has increased. Speed and determinism are the two most important things that you need to optimize for, with the latter, in my opinion, being the most important. We are a very data driven company and are continually monitoring and analyzing all aspects of our platforms to ensure we are delivering on these two goals for our clients.
How does your Lucera Connect™ connectivity management solution help to address many of the networking challenges facing FX trading firms?
Connect™ is a software defined network – SDN. We manage physical connectivity and present Connect™ as a flexible abstraction of these physical connections. Today Lucera have over 1100 unique counterparties on-net, spread over 6 datacenters. It addresses a lot of the challenges inherent in not only the FX market but increasingly, as electronic trading increases and becomes more fragmented, across all asset classes.
Lucera Compute™ is your hosting and managed services offering. What key features and benefits does it provide?
Compute™ is our hosting and managed services offering. We offer bare metal server hosting along with virtual machines and clients can mix and match both offerings. Once a client is using Compute™ they can quickly and easily spin up connectivity on-demand using the Connect™ product.
Lucera is one of the few technology providers able to provide a genuine end-to end service. How important has that become in today’s highly competitive FX trading marketplace?
With offerings like Compute™ and Connect™, Lucera provide firms with a turnkey solution to start or expand their business. Top class infrastructure and connectivity with minimal cap-ex, minimal op-ex and month-to-month contracts. As a firm’s business grows we can scale with them accordingly.
Ok so let’s move on to talk about your new trading platform LumeMarkets. In what ways is this a natural evolution and expansion of your existing products?
LumeMarkets is the natural evolution of our product. It uses the same underlying core architecture providing a deterministic, low latency and highly configurable system for accessing and aggregating disparate markets across multiple assets – FX, Rates, Futures and Credit. The LumeMarkets platform is based on the high performance, low latency system which is already known in the market from our LumeFX platform. The difference is that LumeMarkets provides a single, normalized API for multiple markets: FX, Rates, Futures and Credit.
In what ways have you leveraged the latest technology to ensure the platform has maximum performance, low latency and configurability?
The core pillars of our system have always been deterministic performance, granular configurability in a modular, quickly deployed architecture. LumeMarkets incorporates and expands on these core items. We’ve made the system simpler and added additional automated telemetry throughout. We’ve also rolled out more functionality including additional configurable matching rules, enhanced TCA, trading controls and along with our web-based management console we’ve now exposed all of this via an API for optimal flexibility and control.
What key features and functionality are available with LumeMarkets and how much flexibility do clients have in how they utilise with these?
Our goal is to reduce the time to market and make it for clients easy and quick to provide or take liquidity on new platforms. Along with a normalized API it’s a modular system that provides market data, market access, smart aggregation, smart-order routing, credit and trading controls. The system is highly configurable – it has a CLOB, can provide private rooms, supports last look, RFQ, reference price matching, dark pools, spreading, priority-based matching, detailed TCA and reporting capabilities and a lot more features. The beauty of this all is that most of this is configurable in real-time, via API and as well via our proprietary HTML5 UI. Clients can use as little or as much of this ecosystem as they need and create in a way their own platform.
What plans do you have to roll out even more functionality with the platform over the coming months?
It will come as no surprise that crypto is playing an increasing role in our customer needs today. The LumeFX platform has been able to support crypto trading for over a year and with our large and ever-growing network of integrated venues and counterparties we work closely with our clients to add more crypto venues and exchanges.
In addition, with the support of NDFs, FWDs and Swaps, more liquidity and order management related functionalities will be added to the LumeFX platform in the upcoming months.
What role do you see Lucera and your new trading platform playing in helping clients to meet the challenges of increasing fragmentation, electronification and an associated explosion of data across multiple asset classes?
We’re lucky to have a group of wonderful clients in the FX space and as we push out our system into these other asset classes, we expect to see similar uptake and are already seeing interest from Tier1 Banks and similar client type. Our goal is always to reduce the friction of trading with new counterparties or venues. We see the increasing fragmentation, electronification and associated explosion of data in these markets as something we can help our clients to deal with – from Credit to FX and crypto, Lucera and the LumeFX and LumeMarkets platforms have a role to play providing best in class technology to aggregate, analyze and trade globally across multiple asset classes on low latency co-located infrastructure.
A final word about the COVID-19 crisis. In what ways do you think managed service offerings from leading providers like Lucera has gone towards helping protect FX trading firms from the most serious down-side consequences of unexpected and disruptive events like this?
Well as it relates to technology and infrastructure I believe the managed service model, when deployed correctly, can be a great asset in times of any crisis and or during ‘regular’ market volatility and stress. From having the ability to quickly scale up capacity or having real-time network analytics alerting you of unexpected market events, at Lucera we have global team of experienced industry veterans who have seen many of events throughout their careers and are able to manage clients expectations when it comes to reliability and continuity of their services.