Thomson Reuters: Eikon Trading Capabilities Tackle Duplicate Data Fees

OptionsCity will provide the execution functionality through its CityExecution app, which went live in Eikon's App Studio last week. This is the first time that Eikon will include the ability to execute in any direct fashion. OptionsCity chief executive Hazem Dawani says the vendor has been working with Thomson Reuters for about nine months to get the app live, and that the functionality will bring Thomson Reuters in line with other vendors that offer execution capabilities.

Users will be able to view market data, news and analytics, then immediately execute on this information without having to go to a separate application, look up a particular product and then enter an order.

Leigh Henson, global head of energy markets at Thomson Reuters, says many exchange venues take the view that if a client consumes several different services─whether transactional or just market data─via different providers and distribution mechanisms, then the user should pay market data fees for each service. "By offering execution capability within Thomson Reuters Eikon... if [customers] were previously paying market data fees for separate services for price discovery, market data and execution, then clearly they will only pay once for a combined solution," he says.

The vendors decided to start with this asset class as energy and commodity customers have been struggling with low volatility and the low prices of oil and energy, and are desperate for ways to cut technology costs, Dawani says. "They are paying for market data twice: once for the Eikon application, and once for a separate application that they are using for execution. Even if it's one desktop, one user, they are paying double the market data fees, and those fees could be as much as $400 a month per user per app." Not only can users eliminate duplicate market data fees associated with a second application; they can also eliminate the cost of the second application itself, he adds.

OptionsCity is in discussions to expand the execution capabilities beyond this customer group, and is looking at fixed income and currency products. The only restrictions are the venues have to be "reachable from the CityExecution capability," Henson says. "We wouldn't constrain it to any particular asset class. It's a generic execution capability─as long as they've got links to venues, we can do it."