Update: Redline Bows Managed Consolidated US Feed; Eyes Broader Datacenter Access, Vendor Partners

Early adopters have been able to access the new consolidated feed─which the vendor launched last week, using Redline's InRush ticker plant to aggregate and normalize the data from direct exchange feeds─for four months at Equinix's datacenter campus in Secaucus, NJ, and for around two months from Nasdaq's datacenter at Carteret, NJ, though the vendor says it will make the feed available from more datacenters, based on client demand.

In addition, while Redline has enlisted managed infrastructure-as-a-service provider Options as its infrastructure partner and vendor of record, officials say the vendor expects other hosting providers to want to offer the feed. "We are working with other hosting partners that have this capability, but they are still in the process of getting exchange approvals," says Lee Fisher, vice president of marketing at Redline.

Officials say RedlineFeed provides ultra-low latency normalized data─slightly slower than its direct feed solution, though "orders of magnitude faster" than industry-wide consolidated feeds produced by the Securities Information Processor (SIP) utilities─with the cost advantages associated with managed services.

"InRush with direct feeds has a mean latency of around 1.2 microseconds from the moment the tick arrives at our NIC (network interface card) to the moment a trading application in the same server has this update available to it (via shared memory). That time includes not just the feed handler, but all the steps of composite book building.... RedlineFeed entails an extra server-to-server multicast hop, but will still be in single-digit microsecond range when the subscribing server is in the same datacenter as the RedlineFeed publisher. We believe this is faster than many solutions using direct feeds," Fisher says. "If you add up all the fixed costs of bringing in all of the feeds, building out an infrastructure and installing software, and then divide that number by even a few subscribers, the subscription fees for a shared ticker plant are going to be less than an exclusive ticker plant for one firm. There are also significantly fewer resources required to manage a cross-connect than to manage your own ticker plant."

Potential clients for the feed include large banks seeking to consolidate the number of data vendors they use, while sourcing an enterprise-level feed, as well as firms whose trading strategies are not dependent on the lowest latency, and may have traded using consolidated feeds until now, but are "under pressure to switch to direct feeds to ensure best execution," even though direct feeds may be beyond their budget, Fisher says.

"Prospects include a number of firms that can no longer justify the high costs of running their own ticker plants with direct feeds for the added benefit of a couple of single microsecond-digits of latency. Our lead customers fit all of these scenarios," he adds.

The feed initially covers only US equities and options markets, though Fisher says "global expansion is a top priority" for Redline, but adds that the vendor is not yet ready to discuss details of any plans to add international coverage to RedlineFeed.