As firms continue to add new trading areas and struggle to meet regulatory requirements, high performance databases are becoming increasingly vital, according to a report from Boston-based research firm Aite Group released this week.

“High performance databases [HPDB] help both satisfy current and pending regulatory reporting requirements and mine data for new opportunities,” concludes Aite research director and report author Adam Honore. “To that end, flexibility and performance are key factors for HPDB usage."

The market's demand for data capture and analysis is increasing, said Honore. Quant firms currently capture between one and a half and 100 gigs of compressed data per day, and 60% of quant firms run at least one strategy requiring both historical and real-time data simultaneously. Additionally, an active regulatory environment means that quants' need for stored data will only increase. High performance databases help satisfy both current and pending regulatory reporting requirements, and mine data for new opportunities.

For firms looking at high performance database solutions, Aite recommends the following:

  • Know the trading roadmap.
  • Understand how the database will be used.
  • Listen to vendor recommendations.

Honore notes in his study that “speed is essential for firms running strategies that feature both real-time and historical data.” Aite estimates that 90% of quantitative trading firms currently maintain or are developing at least one trading strategy that requires playing back historical data in conjunction with real-time data.
The report is based on more than a dozen quantitative trading firms worldwide, including hedge funds, high frequency trading firms and tier-one banks. The report also profiles and rates five leading providers of HPDB: Kx, OneMarketData, Sybase, Thomson Reuters (Vhayu Technologies), and Vertica Systems.

Aite Group also sees quantitative trading expanding into new areas. Without exception, every quant firm interviewed plans to move into new arenas in 2010, with nearly half planning to move into equities or add equities from a new market, such as Europe or Japan, and/or add FX capabilities.

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