If the popularity of digital subscription services like Netflix and Spotify are any indication, consumers have come to appreciate the predictability of paying the same amount for a service every month, regardless of how much they use it.
Tradovate, a Chicago startup that provides cloud-based futures trading services, wants to extend that model to the financial services industry.
“We’ve combined a brokerage and proprietary technology into a single service, and it’s offered on an all-you-can-consume subscription basis to active traders,” said President Ryan Hansen. “It’s similar to something like Netflix or Amazon Prime, but in this case it’s all you can trade.”
Hansen said the technology in the futures trading business has suffered from lack of investment since the financial crash in 2008, and that many of the most popular downloadable, Windows-based solutions from before the crash still hold a large portion of the market.
“When you look at the rest of the consumer landscape, that’s really not the case anymore — things have really moved forward,” said Hansen. “So we saw an opportunity to build a ... cloud-based platform that would operate across any device.”
Tradovate also offers apps for Android and iOS devices included in the price of the subscription fee. Hansen said his team wanted to build a solution that was intuitive and user-friendly, and that would be approachable even for investors who haven’t traded in futures before.
To that end, memberships also include a solution for simulated trading. This feature, which lets users test out new trading strategies using real-time market data, helps users get a feel for new markets before putting real money on the line.
Hansen declined to share how many investors are currently using the platform, but said that Tradovate’s target demographic is individuals who trade in futures as a part-time endeavor. However, the company’s user base includes some full-time traders as well.
“The technology we have is very robust,” said Hansen. “It’s simple enough for someone who’s on the lower end of the scale to use, but powerful enough for people who are using it for their profession too.”
Tradovate was founded by industry veteran Rick Tomsic, who also founded Open E Cry in 2002. He started assembling the Tradovate team in 2014 and launched a beta version of its service in 2015. The company officially opened its digital doors in April 2016.
In the trading software industry, maintaining a reputation for speed and stability is crucial to staying in business. Hansen said one of Tradovate’s biggest priorities has to stress test its systems and develop a cloud-based infrastructure that lets its engineering team scale up its capacity at times of increased activity.
In his view, having a technology team that’s worked on similar systems before and know where the potential pitfalls are has been a huge advantage in building out the platform.
“If there’s any type of system disruption or downtime, or if traders feel like there is latency in the system … customers will leave,” said Hansen. “We have customers throughout the United States, in Europe, Asia, the Middle East and South America, and they’ve reported a lot of positive feedback on the system performance.”
In the time since its launch, Tradovate has already gone through several periods of increased market volatility, including Brexit and the U.S. presidential election. So far, Hansen said, the platform has performed without a hitch.
Hansen said the company is currently working on developing an API that will let customers run automated investment strategies on its platform. Tradovate is also in dialogue with a proprietary trading firm to offer its software as a white label solution. With a current staff of just under 10, the bootstrapped company is looking to expand its technology and support teams to fuel upcoming projects.
Images via Shutterstock.
What's your company's story? Let us know with a tip or a tweet @BuiltInChicago.