Computer-based security trading systems

The financial bonanza of the 1980s has created a volatile and competitive environment for companies engaged in secur ity trading. In order to stay competitive, security firms have to rely more on their information systems to increase their re sponsiveness to market conditions. Since the capital investment of an information system is tremendous, any flaws in the final system due to an improper design are intolerable. Thus, ex treme care must be exercised in the planning and design of these systems. This has become even more important since the budgets of many trading houses had to be cut after the 1987 crash. With limited capital spending, management becomes more cautious about the costs and benefits in initializing system projects. The four major issues discussed in this paper (segmentation of the trading process; identification of trading objectives; technical specifications; management support, plan ning and control) attempt to identify the essential attributes and offer design guidelines for building these systems.