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Nasdaq NFX: Why is it so Hard?

In the last year, we've had customers interested in trading on Nasdaq's new NFX exchange. From what I can gather, NFX has been a price leader on super-liquid contracts, and traded volumes have been growing regularly.

But we don't connect to Nasdaq currently -- either for market data or for trade downloads. The reason is simple: it's way too expensive. Last I checked, connecting to NFX for drop copy requires:

  • A physical server sitting in Carteret, NJ, or
  • A hardware VPN connection using a physical Cisco-branded box.

Getting end-of-day market data requires something similar. This is hard for a number of reasons, not least of which is cost. Buying a Cisco-brand VPN box costs money. Getting a service contract for it costs more. Finding a specialized engineer for Cisco hardware adds to that price, and renting space at a server farm willing to house your little Cisco box costs even more than that. All of this, of course, is far less expensive than leasing a slot in Carteret.

This is all ridiculous, because:

  • End-of-day market data is not anything secret. In fact, according to our friends at ICE, it's public information under the Commodity Exchange Act.
  • Trade data is secret, but both ICE and CME provide adequate security through their FIX APIs. The CME even has an awesome new API that we've made an open-source adapter for.
  • Requiring a hardware VPN completely rules out the use of services like Amazon's AWS, which is the virtual data center that pretty much every tech startup I know, uses. Doing so requires tech companies to build out a whole set of server infrastructure, just to connect to Nasdaq NFX.

I'm not sure why all this is the case. The most apparent reason is that Nasdaq relied on legacy, proprietary, low-latency equities infrastructure when they launched NFX.

That's massive overkill for most of the customers we've seen in energy. We hope the guys at Nasdaq will make their services easier to connect to -- ditching the hardware VPN requirement for drop copy, and making end-of-day market data public, the way ICE and CME do. We'd love to add seamless NFX reporting for all of our customers. Making it easier to do, would help us do that.

Reporting in SaaS

Some of the key benefits of true, multi-tenant SaaS rely on the fact that all users run the same version of the software. As a result, they:

  • Are always on the latest version
  • See fewer bugs
  • Get bugs fixed quickly
  • Pay less, because their software isn't customized

That's something that's always been very important to us as an enterprise software vendor. We were warned about this when we started Molecule -- that people in the ETRM industry all want different things. What we found was slightly different from that sentiment. ETRM buyers generally want the same functionality. They do, however, want bespoke reporting.

So, in Molecule, we've spent a lot of time making sure our reporting customizes (even though our code doesn't). To that end, we make pretty much everything in Molecule available in three different ways:

  • On Screen (Standard). Users see a report whose X and Y axes are standard, but that has lots of sorting, filtering, bookmarking, and drill-down capabilities.
  • Dashboard (Customizable). We've integrated a business intelligence (BI) solution into our app. That enables us to build custom, screen-based and e-mailable dashboards for just about any data our app holds. These are customized for each customer. Thanks, Looker!
  • API (Bespoke). Technical users can access just about any data for their account, through our JSON and CSV APIs. These are easily integrated into Excel, as well as downstream systems.

Because our reporting is customizable, we can make sure the core logic in Molecule is sound, tested, and updated frequently--while our users get exactly what they want.

Release 100 ¾

Last night, we deployed our latest release of Molecule.

As usual, it contained new features, feature improvements, and bug fixes. What was special to us, though, is that it's our 100th release! For the last four years, we've been making our software better every couple of weeks, and we've come a long way.

  • Four years ago, we demonstrated a deal capture screen, with a cool-as-hell natural language processing deal entry that could capture financial and physical deals.
  • Three years ago, Molecule could calculate positions and mark-to-market for the first time.
  • Two years ago, we released our first option valuation models, and Molecule calculated option greeks. We became an early adopter of Ember. Most importantly, we onboarded our first customers.
  • Last year, we added portfolio reconciliation, connectivity to exchanges for market data and trade capture, and dozens of other features. We also were among the first companies to deploy Kubernetes to manage our infrastructure.

We've got a ton of cool stuff in the works for this year, but today we took a little break to celebrate, by Jon Snow-ing a piñata filled with--well, you don't want to know. Have a look!