The Logical Solution to Complexity

Complexity in financial markets has increased dramatically with the advent of electronic trading, expanding venue options, and diverse types of instruments. In addition, there is more data than ever before, not just in terms of quantity, but also in terms of dimension — more slices and dices, so to speak. The increase in data complexity and quantity has driven increasingly sophisticated models for calculating fees, commissions, and payouts. Companies have geographically dispersed branches dealing in numerous markets and across diverse product lines. As a result, these firms end up with complicated schemes for figuring out what they owe and to whom, as well as what they earned and where they earned it. On top of all this, companies today, like consumers, expect information to be available at the click of a mouse.

As the Director of Product Management at Firm58, I’m always on the lookout for new ways to improve the flexibility of our software in keeping with our mission to manage fees, commissions, and payouts with solutions that set the pace for our industry. One way we do this is with a new feature called Logical Expressions. Logical Expressions allow our customers to represent multi-layered structures of conditional expressions that determine which trades will get rated by a particular rate scheme. Logical Expressions route trades as they enter our software to ensure that fees, commissions, and payouts are calculated accurately.

Virtually any type of granular data can be used in a Logical Expression. For example, the data points may include a trade’s asset, the liquidity type, the trader, the quantity, the price, the clearing firm, or the exchange. In fact, Logical Expressions support more than 170 out-of-the-box trade attributes. In addition, the feature accommodates data from Firm58’s new Flex Values functionality, which means that virtually any information our customers send us can be used for routing via Logical Expressions.

Here are just some of the capabilities of Logical Expressions:

  • Inclusive or Exclusive Logic determines if a particular calculation applies when the condition is true, or when it is not. For example, a condition may be true when the exchange is NYSE, or when the exchange is any exchange except NYSE.
  • Nested Expressions combines groups of sub-expressions on an “if any of these are true” or an “if all of these are true” basis. For example, a condition may be true when the exchange is NYSE or NASDAQ or Boston Stock Exchange, or it is only true if the exchange is NYSE and the trade adds liquidity.
  • Matching breaks apart symbolic information and applies logic based upon wildcard pattern matching in key financial data variables. For example, a condition may be true when the asset symbol is IB*, which would match IBM, IBN, IBKC, and so on.
  • Natural Language Expression translates each logical expression into an English-like statement automatically for easy verification and troubleshooting.

Want to learn more about how Logical Expressions and Firm58’s rating engine can help you streamline your company’s calculation of fees, commissions, and payouts? Fill out the contact form here.