Order Routing

Order routing, like other essential financial services applications, has become increasingly automated to mitigate settlement risks and lower transactional costs. The monetary gains from initiatives such as Straight-Through Processing (STP) fall short because orders cannot get to market.

Legacy, software-based messaging systems and messaging middleware—key components of order routing—provide neither the sustained, predictable performance nor the requisite availability to meet the contemporary demands of order routing, often resulting in millions of dollars in lost revenue. Specific order scenarios, such as Advertised Trade (AT) and Indication of Interest (IOI), only serve to exacerbate performance by triggering increased message traffic.

Constrained by limitations of their existing message systems, many firms forgo critical risk management steps so they can effectively place orders. The challenges in order routing no longer center around Financial Information Exchange (FIX) transformation and acceleration; they now encompass how to provide a messaging infrastructure that ensures orders get to market and do not miss their window of opportunity.

The Tervela Advantage

The Tervela Message Network™ based on the Tervela TMX Message Switch™ overcomes the challenges of order routing by delivering a silicon-accelerated message transport platform that does not contain the inherent deficiencies of legacy, software-based messaging systems and message-oriented middleware.

For order routing, the Tervela Message Network delivers critical messaging performance while ensuring that trades are processed, and provides many other major advantages, including:

• Guaranteed Delivery—The Tervela Message Network ensures that messages get delivered to their destination, even if the underlying infrastructure experiences volatility.
• Messaging Performance—The Tervela Message Network is able to provide higher-performance messaging than peer-to-peer architectures while delivering scaling capabilities far beyond those available with solutions based on hub-and-spoke infrastructures. Hardware-based message processing and forwarding ensures consistently high performance, regardless of conditions.
• Low Latency—Hardware-based message forwarding ensures deterministic messaging performance—measured in microseconds—even during the most volatile market conditions. Equally important are the consistency and predictability of latency, along with the elimination of risk-generating outliers.

Find out more about the advantages of the TMX, and read further to understand how it also enables high-performance trading infrastructure, market data distribution and market making.