A Market Data Christmas Carol

"Behold these chains," moaned Marley's ghost. "The same fate awaits us all. We are bound by budgets and by technical constraints, and unless we change, we are all doomed."

"Humbug!" I cried. "You're not real. You're my imagination-probably just a reaction to a spoiled piece of cheese."

Marley's wispy figure pointed a chained finger towards me. "Tonight you will be visited by three spirits. They will explain the dangers."

As the apparition faded, I realized that Tom Davin and the FISD's generous sponsors would only have sprung for the very best cheese. And I'd already been served more than three spirits at the open bar.

However, as my clock chimed 1am, the first spirit-a woman with pale skin from working long hours locked in a datacenter-entered my room and announced herself.

"I am the ghost of Christmas past," she said, and whisked me back in time, where I saw a younger version of myself applying for my first bank overdraft. Back then, I recalled running up a huge credit line one Christmas that took months to repay, and that not being aware of my exposure had cost me dear, and taught me to be responsible with credit.

"But not everyone was as careful this year," the ghost said. "And the credit crisis is forcing firms to cut budgets, and to fire some of us hard-working data staff."

Before I knew it, a second spirit appeared-a bloated, rotund fellow. "I am the ghost of Christmas present," he said. "My purpose is dealing with rising market data rates-Opra data, penny pilot prices, and all the data from new exchanges and MTFs in Europe. I live in the present, because frankly, I don't have time to think about the past, and I don't want to think about the future. Unless we change, we'll be overwhelmed."

Lastly, an eerie figure in a black, hooded cape swept into my room. "I am the ghost of Christmas future. My scythe represents execution," it said, showing me a vision of trading firms being buried alive under futures data administration. Currently, futures exchanges supply data to firms and vendors-and allow them to redistribute it at will-for free, providing that data is used exclusively in execution systems.

As a result, many do not track data usage in the same way as they would paid-for data, and do not have appropriate controls to report or pay for it, should the exchanges begin charging fees, as they already charge charting vendors.

"That could spell the end for these systems-and will mean grave consequences for those who aren't on top of that data," the spirit hissed.

The spirits' messages mean that the world of market data is no place for a Scrooge. There can be no cheap fixes for these issues, and as we look forward to 2008, firms must be prepared to increase the budgets allocated to data if they want to avert more crises, deal with rising volumes, and properly manage data in the face of possible fee policy changes.

On behalf of the IMD team, I wish you all heartfelt season's greetings, and every happiness for the season of goodwill. We thank you all for your support during 2007, and look forward to working with you in 2008. My wish is that every one of us finds time over the holidays to forget about work and devote ourselves to those things even more important than market data.

Max Bowie