Buy AND Build: How LiquidityBook Answers an Age-Old Technology Question Through Powerful Technology and Flexible Integration

At LiquidityBook, we pride ourselves on the flexibility of our trading technology. This has long been one of our defining qualities – by itself, our platform contains powerful tools that enable highly configurable workflows for the buy and sell sides. But today, with our powerful, continuously enhanced APIs, clients can assume even greater control of how they leverage our solutions, gaining a competitive edge in the process.

Our APIs enable clients to access all our services at a component level and tightly integrate them with their own infrastructure. That means they can go beyond typical API use cases (sending single orders or baskets) and access efficiencies across the trade lifecycle. For example, historically, when firms build their baskets and send them via API, they have been forced to manually rectify any failed locates or compliance rules, or otherwise cancel the basket and re-send it. The other option is to repeatedly duplicate the locate, compliance and allocation rules to avoid violations, a time-consuming process that adds little value. By accessing these services within the trade construction process, clients can build the right basket the first time, eliminating the need for manual intervention and costly, risky duplicative efforts to create a truly automated process.

Clients can retain their own custom front-end or web app and inject our functionality at precise points in their workflow to unlock a world of possibilities, whether by embedding our APIs or by embedding our trading screens directly into their applications.

This approach presents benefits to both sides of the Street. This unprecedented level of integration means firms can effectively buy AND build their trade management tools, eliminating one of the key questions – buy OR build – that has historically defined capital markets technology strategy.

Allocations are one of the most compelling use cases for our buy-and-build capabilities. Buy-side firms can leverage LiquidityBook’s robust decision tree to determine the individual allocations for any given order, dividing them across any number of SMAs or managed accounts. Our system can automatically determine which funds should trade on cash and which should trade on swap, as well as any that should be excluded. Clients receive this information from LiquidityBook and can edit the individual slices as they see fit.

With other systems, clients must construct the slices themselves and duplicate all trade business logic to identify the optimal approach – work that is difficult and time-consuming (and which introduces the possibility of transcription errors), but not value-additive in any way. We handle the middle layer that ensures trades are valid and are being correctly distributed across the overall portfolio, so our clients can focus on their own proprietary analytics on their side. This enables a level of granularity that no other provider can replicate.

Over the years, we’ve worked closely with clients to stand up buy-and-build systems that can trade highly bespoke products like repos, or access forms and order entry tickets directly from platforms like Slack. The possibilities are truly endless.

This creates efficiencies for firms of any size or structure. Smaller firms can add their special sauce and punch above their weight without drastically increasing headcount, while larger firms can streamline tedious yet necessary processes and put the full force of their development team behind alpha generation. 

Next-generation clearing brokers like Clear Street and RQD illustrate the power of this buy-and-build approach. These automation-first firms are selling themselves based on their technology expertise, so we’ve worked with them to deeply embed into their workflow and stand up straight-through processing. This enables them to focus on innovation and differentiation, and not the nuts and bolts necessary to enable it.

We also work tirelessly to make it as easy as possible to both buy and build with us. While other providers require clients to transform their data each time it interacts with their technology, our APIs have a built-in transformation layer, so any format works – data converts to our format before it gets to us and back to your format when it is returned. And as with all aspects of our business, our deeply experienced client service team stands ready to help any market participant to combine our functionality with their own.

Buy-and-build is just one use case for our integration and flexibility – by employing the same concepts, clients can also integrate any aspect of our system with other best-of-breed tools on the market, from accounting to data warehousing and more, streamlining workflows and optimizing costs. That’s a story for another day, but an equally compelling one.

So, to recap: don’t get bogged down by the age-old buy-or-build question. LiquidityBook is built to give you the best of both worlds – and that means enhanced trading capabilities, more efficient employees and happier clients.



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