Traders, You've Got IM

BOSTON (HedgeWorld.com)- AOL Instant Messenger is the most prevalent instant messaging system used by the general population, and now it also is part of a new technology offering being distributed by brokers.

IMTRADER now has licensed connectivity with AOL Instant Messenger. Instant messages can be converted to electronic trades using the industry standard FIX (financial information exchange).

In the financial industry, "We discovered that hedge funds in particular are heavy users of AOL," said Furqan Nazeeri, chief executive of Pivot. He said the IMTRADER software was built in 2002 but until now wasn't compatible with AOL, which is a system Pivot estimates 80% of traders use.

Brokers' trading and research systems are part of the offering. The system connects with tools hedge funds are most familiar with and reliant upon for communication with a prime broker, Mr. Nazeeri said.

Developers of IMTRADER made trade execution possible by in real time by scrolling through tens of thousands of instant messages sent by traders to determine the cadence of the trading terminology. The system can decipher between a generic message and a trade order by focusing in on terms such as "top" instead of "limit" or the letter "b" as a short cut for "buy."

The IMTRADER technology originally was part of Eze Castle Integration, a technology outsourcing firm that has more than 350 hedge fund clients.

The seamless process of instant messaging the trade and linking with an institutional broker's order management system may negate the need for a traditional trade order management system for some managers. So instead of taking weeks and months to install an order management system, hedge funds now need just a few hours, said Mr. Nazeeri.