From AMCs to ETD Execution: The architecture behind faster time-to-market
Practical patterns Horizon uses to launch faster and hedge smarter
In Part 1 of this series, we explored the market forces shaping modern trading workflows. In this article, we’ll go deeper revealing how Horizon Trading Solutions delivers faster time-to-market through proven architectural patterns, trade-offs, and reusable templates.
Whether you’re managing Actively Managed Certificates (AMCs), ETF options, listed certificates, or Exchange-Traded Derivatives (ETD) execution, the principles below help accelerate delivery, improve automation, and enable smarter hedging.
AMCs: Building dynamic baskets on solid plumbing
Consolidate static data for accurate P&L
Instrument static data is key. Start by consolidating multiple vendor data sources into a single master view, supported by flexible data mapping, cleanup, and governance. This foundation ensures smooth trading workflows, from pricing to trading.
Design proxy strategies for liquidity gaps
Liquidity isn’t guaranteed. To remain consistent and reliable at whatever the time of the day or the market conditions, a customizable proxy strategy is required. Define backup assets, prioritization rules, and time-based schedules for when constituents become illiquid or underlying markets are closed.
Standardize quoting across assets
Treat quoting as asset-agnostic: theoretical price + spread + target markup. Distribute quotes via standard market data buses (e.g. Refinitiv TREP), FIX, and company Web portals to ensure consistency and auditability.
Integrated hedging and rebalancing
Accept hedge orders from AMC sponsors or internal bookkeeping systems and consider hedging and rebalancing flows as FIX DMA where appropriate. AMC structure can be represented as a master trading portfolio, derived into sub-portfolios to track constituents’ exposure and embedded risk monitoring and hedging.
Maintain real-time portfolio composition
Use a real-time index algorithmic logic to maintain the AMC’s composition and compute both spot and theoretical prices, aligning risk and execution views seamlessly.
Structured product hedging and ETCs: Scaling out, not up
Elastic execution architecture
Use scalable algo workers that can expand horizontally during peaks (client flow + hedge flow). Always plan capacity for market shocks, and record tick and OHLC data for backtesting and algo calibration.
Treat Crypto as just another asset, with caveats
Execution logic for crypto trading should mirror FX (or even vanilla equities), but exchange APIs and protocols vary widely. Implement robust routing that blends static preferences with dynamic venue selection based on live conditions. Keep your proprietary logic in-house—the framework should never require disclosure of IP.
Seamless IS integration
Expect to plug into OMS, Middle Office, and SOR systems. Prioritize standard record formats and data models to achieve interoperability at scale.
ETD Execution: Fast onboarding, safe automation
On-Demand instrument loading
Load option classes and contracts only when needed, automatically or manually, by resolving data through market-data vendors and internal stores. This approach minimizes overhead and reduces time-to-first trade.
Member vs. Broker access: Choose strategically
Choose native exchange membership for advanced order types and low latency; use broker access to accelerate footprint expansion. Many clients adopt a hybrid approach for flexibility.
Straight-Through processing by design
Expose open “API hooks” and callbacks throughout your workflow to provide full flexibility to integrate with internal risk, credit, and eligibility checks. When a vanilla care order passes all validations, auto-release it to market.
Keep execution cross-asset by default
Maintain an asset-agnostic execution layer, with only minimal adaptations for exchange-specific quirks. This avoids redundant engine builds across asset classes.
Conclusion
Whether you’re launching AMCs, ETF options, or listed certificates, or industrializing ETD execution, the right architecture can dramatically reduce time-to-market.
What to Read Next
Want the technical patterns behind this strategy AMCs, ETF options, listed certificates, ETD execution, and how we approach 24/7 resilience? Talk to our team about a discovery workshop.