Tradovate Futures Trading Blog

Cloud-Based Trading: Driving Benefits

Posted by Rick Tomsic on June 2, 2015 at 4:12 AM
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What is the cloud?

The cloud -- short for cloud computing -- is the inescapable buzzword that has made its way into the mainstream. And it’s not going anywhere.


When people think of “cloud storage” they may not be certain where exactly the “cloud” is, but it’s a physical infrastructure made up of many computers housed in massive warehouses all over the world. The cloud, simply, refers to software and services that run on the Internet instead of your computer; a process of sharing resources to optimize performance. Practically speaking, that means using a network of computers to store and process information, rather than a single machine.


cloud-infographicIf your data lives “in the cloud,” it actually lives on a company’s server, and you more or less pay a membership fee to work in that company’s sandbox. Popular examples of cloud service providers include Google Cloud Platform, iCloud, and Amazon Web Services.


It is inevitable that downloaded trading platforms will go the way of the dinosaur and cloud products are the future. So what does this mean for the active trader?


What are its benefits?


Increased Reliability -- Relying on the agility of a larger network of computers is a great idea as users don’t need to worry as much about hardware specifications like RAM or hard drive space, because the network can do the heavy lifting. Distributing the load across many servers means web-based applications can run more reliably and efficiently. These servers are always updating and if one server crashes, there are others to pick up the slack.


Total Mobility -- Another benefit is that traders can access the data from anywhere. These days the ability to seamlessly access data across multiple devices from anywhere is the absolute rule, not the exception.


Data Security -- According to Businessweek, some 800,000 laptops are lost each year in airports alone. Think about all that monetary loss... but just as important the time to get back up to speed with a new machine! However, when everything is stored in the cloud, data can still be accessed no matter what happens to a machine. If your machine is lost you can be back trading in no time.


Greater Collaboration and Control -- For companies or individuals that store documents in the cloud, the same document can be shared and worked on collaboratively, instead of sending a document back and forth, creating multiple copies. Everyone can be on the same page (pun intended). The same is true in trading, allowing for the sharing of ideas.


Level Playing Field -- The cloud is both a consumer AND enterprise-class technology available to small and large businesses alike, so now all businesses can benefit in certain disaster recovery situations, not just giant corporations.


As the demand for lower trading costs intersects with the demand for greater and more expansive market access, the cloud plays an integral part in fulfilling this demand.


Traders want to trade from their home, their car, the beach -- from anywhere -- and with cloud-based web and mobile trading applications, this is not only possible, it is quickly becoming the norm.


With a cloud environment trading applications no longer need to consume resources locally, allowing traders to quickly access trading applications via the Internet. This ensures that app deployment and execution are both smoother and faster.


At the FinTech Exchange 2015 Adam Honore, CEO of MarketsTech, LLC, stated that "locally installed trading applications will be in a death spiral" within the next 5 years. We could not agree more.


Financial technology firms who outsource their systems and data into the cloud enjoy greater efficiency, scalability, performance, and they see a reduction in capital costs. And ideally those savings can (and should) be passed along to the trader.


Besides the cost and flexibility, cloud-based trading applications have the distinct opportunity of providing traders with a new wave of analytics and variable-cost data.


The future is here! And if you’re not trading in the cloud, you’re trading in the past.


Other consumer parallels


While the cloud tends to be synonymous with startups, according to this Forbes article, more than half of U.S. businesses use some form of cloud computing. This percentage is on an unstoppable upward trajectory.


Consumer brands continue to evangelize the widespread adoption of the cloud, from Apple and Amazon, to Microsoft, Netflix, and Google. And if you have an iPhone, chances are that you’ve already interacted with the cloud to download music from your iTunes library or to back up your data to the iCloud.


The cloud is covering all aspects of life: Cloud-based applications like Adobe’s Creative Cloud offer subscription services to applications that subscribers can tap into on any desktop or mobile device. Subscribers can log into Netflix, start an episode of Mad Men on their TV, pause it, and re-start it on their tablet as they travel. Asana is another teamwork tool, providing shared task lists to help people in organizations stay in sync. Then there’s Dropbox, DocuSign...the list goes on and on.


This is the age of on-demand mobility embedded in security and efficiency, and it is made possible by the cloud. This seamless experience is encompassing everything from shopping and travel to trading and investing.


And at Tradovate we’re on board.


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