Patsystems powers growth at R.J.O'Brien

It soon became apparent that there was more to Patsystems than its popular trading front-ends, and that there was an opportunity to leverage the back-end functionality on a large scale. Impressed with the performance of the Patsystems platform serving the global order desk, RJO decided to make Patsystems the main backbone for exchange order routing across the entire firm. This approach delivers several key benefits:

• Streamlined infrastructure: Historically, RJO has managed exchange connectivity using a number of different systems, some proprietary and some supplied by vendors. By consolidating much of that connectivity onto Patsystems, RJO is significantly reducing the cost and complexity associated with supporting numerous different systems. 
• Economies of scale: RJO works closely with Patsystems to ensure the technology suporting the 24-hour order desk is working optimally. Rolling that system out to other parts of the business maximises the return on that investment. 
• Keeping pace with exchanges: Exchanges are continually adding features and functionality to their marketplaces. RJO now has a system and vendor it can rely on to keep pace with these developments, enabling new functionality to be rolled out to customers more quickly and cost effectively. 
• Maintaining customer choice: RJO is committed to providing its customers with the trading tools they need. As well as its own proprietary appliations, Vantage and WEBOE, RJO offers J-Trader and Pro-Mark, and other third party front-ends. Because RJO and several third party vendors have written to the Patsystems API, many customers' preferred front-ends can be seamlessly integrated with the Patsystems infrastructure. 

As RJO's primary API for CME Group Globex®, Patsystems now handles the majority of the firm's order routing, and RJO plans to migrate more of its exchange connectivity to the platform. "Patsystems proved itself on our high volume global order desk to be a stable, well supported system we can rely on, with the functionality we need. Rolling it out across the business provides compelling economies of scale," says Gillmore. "On top of that, the flexibility of the API means that we can reap the benefits of consolidating to a single order routing platform, while still providing our customers with their choice of proprietary or third party front-end." 

Broad connectivity and geographic expansion powered by XLink

RJO is a full clearing member of the major US and European exchanges and, in order to deliver the broadest possible range of trading opportunities to its customers, it partners with carrying brokers to provide access to other exchanges. Historically, this has required a number of different solutions, including writing to proprietary APIs provided by the carrying brokers, routing via an ISV, and relaying orders by telephone. Supporting all these was cost and labour intensive, and resulted in a variable customer experience. 

Using XLink, Patsystems' solution for bridging different trading infrastructures to leverage exchange connectivity, RJO can now connect quickly and easily to other Patsystems-enabled brokers. This provides access to the exchanges cleared by that broker not only via RJO's proprietary trading systems, but also from the global trading desk via Pro-Mark and from customer sites using Pro-Mark or J-Trader.

XLink is also powering RJO's expansion into the Asian market. Having spotted an opportunity to export its highly successful, customer-oriented business model, RJO evaluated the options for deployment in the region and found that a Patsystems installation was by far the quickest and most effective route to market. "Writing directly to the APIs of multiple exchanges or carrying brokers is prohibitive in terms of time to market," says Gillmore. "By contrast, the speed with which we can implement a Patsytems installation and set up exchange connectivity via XLink is compelling. Patsystems really differentiates itself with its breadth of exchange connectivity, and that's especially true in Asia."

Alongside the technical capabilities, Gillmore says that RJO found Patsystems' reputation in the region helpful in establishing business relationships. "Patsystems is so universally known and well adopted in Asia that running a Patsystems infrastructure gives us instant credibility." He adds that by using XLink to connect its Hong Kong and Chicago operations, RJO is able to service the appetite for cross-border trading in both directions. "Rolling out our business model overseas with this technology brings us the additional benefit of a hub through which we can get people from across the world trading into the US. And at the same time, we get the opportunity to offer our domestic customer base access to international markets."

Delivering value across the board

As the largest independent futures broker in the US, RJO manages a huge number of accounts and handles high trade volumes on a daily basis. In order to maintain the level of service RJO prides itself on, the order routing technology underpinning that activity needs to be robust, reliable and efficient. It also needs the flexibility to support the broad range of front-end trading tools RJO offers to its customers. Additionally, it needs the scalability and market penetration to support a major geographic expansion program reliant on partnerships with other brokers. The Patsystems platform delivers on all counts.

RJO's relationship with Patsystems began when Pro-Mark was selected as a backup to the firm's proprietary trading systems in use on its 24-hour global order desk. Just three years later, Patsystems has become a core technology at RJO, handling the majority of exchange order routing via its flexible, high-performance API, and powering geographical expansion into Asia with its cross-platform access solution, XLink.