Software to assist in trade surveillance

market and trade surveillance

With the advent of computer technology and its advancement to what it is today, pilferage and malpractices are at its helm in on-line trading. The positive side of technology is misused in any field by unscrupulous elements, turning it to impact negatively and computer technology is no exception. To check this scenario, the regulatory authorities and market experts in this area have initiated and introduced many control systems. A surveillance in this direction is thus in place on marketing and trading.

Not long ago, there have been cases of ‘market crash’ caused by high-frequency traders in different parts of the world. People are left wondered as to what happened to the market when ‘flash crashes’ are often heard of. The entire trading in the stock market comes to a standstill by applying a term called “spoofing” and “layering” and other associated malpractices.

Spoofing means a bid or an offer on a stock with intent to cancel before its execution. Layering is when a trader raises multiple orders that he does not want to execute. Therefore, spoofing and layering in a layman’s eyes is jacking up the price of a particular company share by raising massive sale order. The market price is ballooned up by raising sale orders of this share for a higher price. The unusual price fluctuation will make the traders bring down the original price considerably low and at this time the person who raised sale orders will buy huge quantity of shares to his benefit. He will at the same time immediately cancel the sale orders resulting in a plunge in the market. Such upheavals would impact the market and a fast crash can occur easily.

Market and trade surveillance demands sophisticated technology to alert the market and its users in such situations.  Many software companies developed remedial software to detect this unlawful activity. This software includes the following alerts designed to meet the needs of introducing and executing brokers:

  • Layering & Spoofing
  • Volume Detection
  • Quote stuffing
  • Order to Cancel Ratio
  • Marking the Close
  • Wash Trading

The above are terms ending up to manipulation from different levels of buying and trading.  Exact interpretations can be had from Google.

OneMarketData is where the stock brokers and others dealing in stock market and suffering from above irregularities should once visit. Their intraday trading solutions are the best in the industry thus far. Having acquired Tick Data, Inc recently, this market giant in stock market solutions is raging towards new heights. They are excellent in in-built software packages and tailor made solutions to any and every problem a broker would be facing.

OneMarketData’s surveillance service delivers integrated, on-time examination of order flow, one end to the other breach detection, workflow management alerts and replay activities. Their OneTick Market Surveillance comprises of built-in, ready to configure alert rules to support the executing brokers. They also provide tools and user interface for audit alerts. Their products are cost friendly, and in fact, it is far less than the in-house development cost. Indeed, it is a must buy solution package for every broker.