Instant Messaging Platform Adds International Trading

Pivot Solutions has released a new version of IMTrader, its instant messaging network and trading system, that adds the ability to trade international equities with order completion using Pivot's patentpending IM-to-FIX technology.

The New York technology company also announced that its flagship IMTrader product allows brokers and fund managers to sweep the markets for hidden and visible liquidity—including crossing networks or "dark pools." This functionality is the result of a partnership with Burbank, Calif.-based agency brokerage UNX. "We view the partnership as powerful, as it takes advantage of the speed and immediacy of what IMTrader does for the market today and couples them with UNX's powerful algo strategies," said Ed McDonnell, SVP of sales for the instant messaging and trading developer.

The new IMTrader release, version 3.4, "reflects our focus on functionality that brings greater

responsiveness and effectiveness to our clients' workflows," Pivot CEO Furqan Nazeeri said in a statement. "Our clients are telling us that they want the benefits of IMTtrader international trading and the speed of IM when sweeping the markets for liquidity."

IMTrader version 3.4 lets users simply click on an IM "buddy" ID to search out hidden liquidity. The company, a spin-off of Boston-based Eze Castle Integration, said the new capabilities will initially be rolled out to clients in Canada, with European distribution to follow this year. IMTrader has more than 2,000 users in institutional sales and trading, serves over 350 hedge fund organizations and has traded more than 3 billion shares since its inception in 2004. Version 3.4 also brings expanded messagebroadcast capability. "We've put in some tools that allow for message prioritization and other enhanced ways of broadcasting liquidity advertisements," said Nazeeri.

"The third aspect of this release," he added, "is that we've connected IMTrader-- built in the ability of IMTrader to connect-- to crossing networks, so now our buy-side customers can access dark pools via IMTrader or AOL Instant Messenger as a front end. There are now over 30 dark pools, and each one has multiple algorithms for accessing the pool. We're making it easier for our hedge fund and buy-side customers to get access to these venues."

Accommodating algorithmic trading, version 3.4 lets users simply click on an IM "buddy" ID to search out hidden liquidity. "These capabilities provide competitive advantages to traders and fund managers as they increasingly rely on instant messaging," said Nazeeri. "We can see that they value the speed and immediacy of IM, and IMTrader delivers that in a tool that is optimized for capital markets." As with all versions of IMTrader, the company said that the latest release continues to advance the IM experience with innovative forms of message notification, detachable chat tabs, and distribution-list sharing across groups. Version 3.4 also has the ability to track and manage message blasts, automatically identifying which recipients received, opened and responded to a message; and it can quickly resend messages to those who did not respond.

A message prioritization feature shows all open conversations in a single window, color-coded for immediate recognition of the most important customers and orders. Conversations in chat rooms, one of IMTrader's more popular features, are archived for quick reference. "The bottom line is that IMTrader makes an individual trader more informed, more responsive, and more valuable to his or her customer," said Nazeeri. Pivot Solutions has financial backing from Softbank Capital, Draper Fisher Jurvetson Gotham Ventures and Hudson Ventures as well as Eze Castle Integration, which initiated system development in 2002.

IM to UNX
Algorithmic trading was an important factor in the Pivot-UNX tie-in. "What we want to do is provide our algorithmic and execution technology in partnership with any of the products we can," said Scott Harrison, president and CEO of UNX. "That's the biggest change for us. We're unbundling this technology from our products and starting to release it to the market so we can get broader distribution."

Investment professionals can use instant messaging to communicate orders to UNX and rapidly and anonymously seek out liquidity. Sophisticated algo trading occurs through a simple IM interface, initiated by clicking on a "buddy list" name. UNX's algorithmic market access technology is designed to extract available liquidity from nearly every electronic destination. That's integrated with IMTrader's IOC (Immediate or Cancel) Sweep tool for spanning electronic markets at user-defined limit prices, and Penny Probe, which extracts liquidity by algorithmically sweeping within the bid-ask spread at ascending or descending 1 cent increments.

Explained Pivot's McDonnell: "We see increasing interest in rapidly sweeping pools of liquidity from fund managers, traders and other investment professionals, particularly when it comes to crossing networks. This new capability allows them to use the immediacy of instant messaging to extract liquidity while leaving no footprint when they do so. It provides our customers with advantages in both speed and thoroughness. UNX's sophisticated algo capabilities on the IMTrader network greatly expand the value we can bring to investors and fund managers."

Matt Michelsen, UNX senior managing director of business development, commented that UNX's clients "are increasingly relying on the benefits of instant messaging, and our commitment to them demands that we meet their needs with the most robust technology available. We have been working with IMTrader for a year and have seen considerable value in its communications functionality. It was a logical step to take the speed and immediacy of IMTrader and merge that with our algo strategy services."