Pioneer in Payout

Imagine a race car driver driving a race car at high speeds with a broken speedometer. Nearly improbable in today’s world, but this is the day-to-day scenario at many of the Prop Trading Firms and Hedge Funds. Executions do happen at high frequency, but the actual accounting of various costs involved with a trade, especially profit/loss split between various parties within a trading firm are done in manual way, typically using a spreadsheet. They are very cumbersome, tough to track all the costs, there is generally a key man dependency when something goes wrong and often lead to discrepancies between trader and trading firm. Many small to medium size trading firms typically spend anywhere from 1 to 3 months calculating their payout numbers. With each additional trader onboarding, the workloads get heavier for the accounting department. There are so many costs associated at various levels like per transaction charge including commission, CMTA charges for options, margin interest, short stock interest/rebate, etc., account level charges like profit sharing deals, net cap charges, etc., trader level charges like health insurance, seat charges, market data entitlement charges (aka below line expenses), etc. For a firm setup in a hierarchical structure, which is the typical setup in many prop trading firms (like Trader, Trading Desk, Division, etc.) how does profit and loss flow from one level to another? To add to the complexity, some charges might be eaten up at one level or one can add a wig (like few basis points for margin interest on top of the clearing firm rate). These complexities begin to snowball making it tough/time consuming to deliver...

One Book, Many Primes

Trading firms typically prime with more than one Prime Broker for various reasons. The reasons may be access to different markets stock loan capabilities, enhanced leverage, etc. as decided mainly by the factors of interest to front office/trading desk. When assimilating the raw data of a single Prime is tough by itself, what do you think your level of success will be consolidating data across multiple primes? With different formats, accounting methods and ever changing data structures, this front office decision could become a nightmare for the middle office/operations team. The bottleneck in operations would easily cascade down to front office and management in analyzing the data to make business decisions, let alone dealing with day to day operational issues. Utilizing their multi-decade experience in dealing with data output from Prime Brokers, the MiddleLink team has pioneered a sophisticated product called Prime Plus. Prime Plus understands data from a Prime in its native format and translates into Prime Plus Book. Each data point like cash balance, transaction, positions, etc. are converted into Prime Plus format by applying nuances specific to each prime. MiddleLink team keeps on top with any changes that occur in the format, making the transition for our clients seamless and transparent. With data from multiple primes in one single format, Prime Plus provides a solid foundation for our clients to play with data starting from reconciliation to advanced profitability analytics. As they say in Wall Street, the possibilities are wide...