Is now the right time for open source in hedge funds?

Marketcetera's market opportunity is ripe with hedge funds.

Matt Asay Contributing Writer
Matt Asay is a veteran technology columnist who has written for CNET, ReadWrite, and other tech media. Asay has also held a variety of executive roles with leading mobile and big data software companies.
Matt Asay
2 min read

I've blogged about Marketcetera before, a cool open-source hedge fund trading platform. Later this week I'll be posting an update after I interview the Marketcetera team, but keep bumping into stories that make me wish the interview were today, not Thursday.

For example, Businessweek recently offered up an opinion piece from a San Francisco-based hedge fund trader, who argued for an open-source trading platform:

After headcount, a typical hedge fund's largest expense item is technology. Much of that expense goes to the trading systems that we use. Let me tell you a secret: Our "secret sauce" is our trading strategies--it's not our systems for trading. These platforms can cost even a smaller fund like mine hundreds of thousands or even millions of dollars a year. Look, I just need a trading platform that executes our strategies. The software needs to connect to other systems that our different brokers and exchanges use and complete the trades driven by our increasingly automated strategies. This trading platform market is probably a $1 billion annual industry today.

It's also exactly what Marketcetera already offers. Has the Marketcetera team called this guy? I'm hoping the answer is 'Yes.'

Computer Business Review recently went into detail on the Marketcetera trading platform, calling out its high download numbers and promise for the hedge fund industry. For those who think that hedge fund traders can afford to waste money on expensive, bloated systems, this article offers good reason to believe otherwise.

In this environment, no one can afford to waste money. It doesn't grow on trees or hedge fund trading desks. But I believe Marketcetera is well poised to help hedge funds trade more efficiently and, hence, make more money with fewer resources. Yes, even hedge funds need to do more with less.

I can't wait to talk with the team later this week.