Global technology provider for electronic trading and investment management, Horizon Software, has entered a collaboration partnership with Thomson Reuters to provide an advanced 'one-stop-shop' derivatives trading platform, along with Chinese market data, for quantitative trading to the Chinese market, further enhancing the experience of quantitative trading participants.
Horizon platform enables securities houses in China to trade ETF options, both locally and globally, and provides connectivity to all the exchanges in China (SSE, CFFEX, Commodity Exchanges), according to Clement Pelletier (pictured), Apac sales director at Horizon.
"This is a significant development for derivatives trading in China," said Pelletier. "Horizon was the first foreign vendor in China to provide sophisticated trading software back in 2012. We have since built a great reputation in China by continuing with our approach of putting the client at the centre of our technology, our Trade Your Way philosophy. I am confident that our clients will quickly see the competitive advantages of having a low latency trading platform and reliable market data resulting from the collaboration with Thomson Reuters."
According to Sylvain Thieullent, chief executive at Horizon, the partnership with TR makes sense to Horizon because both firms are targeting similar trading style. "We have identified firms purchasing data feed from TR with a potential interest to benefit from the use of our platform," said Thieullent. "We see these more and more traders mature about the way they want to trade and about handling trading volumes in an automated way. We believe our platform will help these traders."
The collaboration between the two firms will allow to share new opportunities in mainland China, and to grow the market as the level of automation around trading and the knowledge about the different providers is a work in progress in China, according to Thieullent. "TR and Horizon are already visible players in some Apac markets and we believe this partnership will give us more visibility and credibility in China," said Thieullent. "For us to be able to partner with TR is also very positive recognition of the value of our trading platform. We are not in Apac to strike just one deal and then leave, but to have a presence in the country in the long term."
At a products level, Horizon will follow market trends and respond to demand, although the platform has been geared to be able to cover many different instruments. "If there's demand for structured products and ETFs, they will be able to deploy the tools they need to cover those products," said Thieullent. "The nature of today's Chinese market is pretty much limited to vanilla products but China had in the past a warrants market which went dry somehow but there is still room to relaunch other kind of products and take advantage of the new tools available."
Making predictions about China is difficult but the firm believes there is scope for its services, and wants to be in the market when opportunities around new investment products arise. "By being present in China we can be act as a hub for investors seeking to invest in Hong Kong which is a gateway for more sophisticated traders with a much wider set of products," said Thieullent. "We can leverage our offering in Hong Kong and replicate it in China if there's demand."
Hua He, head of market development, financial & risk, China at Thomson Reuters said that the partnership is aimed at delivering a superior derivative trading experience for all participants in the Chinese market, with "a powerful and winning combination of trading technology with news, data and research. I look forward to our joint clients quickly benefiting from this collaboration".
Horizon is seeing strong demand for more sophistication in trade execution, with Horizon Automated Trader delivering both, as well as significantly reducing the time required to build trading strategies. "Thanks to the growth of the global ETF market we are seeing increasing demand for Delta One," said Pelletier. "That, along with new opportunities coming from markets such as China have the potential to change the global trading landscape of the industry."
Horizons is working to establish itself ion the market as a one stop shop in all the markets it is present, to serve the needs of each specific market. "Singaporean investors are not only interested in investing in Singapore, and we see this market as an ideal place to make inroads to other markets such as Australia, Japan and the Middle East," said Thieullent. "Singapore is a buy-side oriented market but the sell-side is also increasing its profile. In terms of assets, fixed income dominates but we think some of the developments by the SGX will push the use of other products such as FX structures and other instruments."
According to Pelletier, Singapore is definitely a destination for Horizon as it is a market "with huge potential to deploy risk management tools and trading platforms" as seen by some of the most recent developments. "Singapore is a very dynamic market and it's kind of replicating what we have seen in Hong Kong in the sense that there is appetite for trading pan-Asian markets," said Pelletier.
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