Our client from the spread bet/CFD industry needed a ‘price adjustment derivation engine’ building. This is a system that brings in stock exchange prices, adds a small random derivation, then outputs the ‘derived feed’ into a trading system. This allows our client to pay the stock exchanges for a derived licence, as opposed to a full licence – approximately a 2/3 cost saving. We have subsequently rolled the service out to other clients.
TYPICAL FLOW OF MARKET DATA
UNDER THE HOOD
A price adjustment derivation engine works by making random adjustments to the value of each market in a trading data feed, creating a ‘derived data feed’.
Our engine injects this true randomness by using entropy pool methodology. An entropy pool is a source of random bits used to derive random numbers via a range of algorithms.
This offers a robust solution that cannot be reverse engineered; we have tested our engine’s derived feed against the reverse engineering policies of major exchanges.