Monday, July 25, 2005
Interview with David Smithey, TradePortal Chairman and CEO
My interview this morning is with David Smithey, Chairman and CEO of Irvine-based TradePortal (www.tradeportal.com), a provider of software for the financial services industry.
BK: David, tell me a little bit about TradePortal, and the services you offer to the financial services industry. What does your software do?
DS: TradePortal was formed in 1998 by a group of trader's who were looking for a better trading system that utilized direct market access(DMA) capabilities. In 1999 the repeal of the Glass Stegal Act of 1933 provided the company with a clear mandate to develop DMA technologies in response to what we believed would become the replacement trading technology for exchanges world wide. TradePortal engineers DMA trading software; our flagship product is the Matrixsuite enterprise trading application. Our software enables traders to route orders directly to market makers and ECN's, using advanced order entry types, through a technology that executes trades at the fastest and fairest market prices.
BK: How does your software differ from other trading software platforms, and how does your software fit into very crowded trading software landscape?
DS: Our software differs from other trading platforms because of our architecture, which was designed in accordance with our broader vision of the markets and deeper understanding of DMA technology.
ACMA defines our approach:
Architecture is n-tiered, loosely coupled, component based and inter-operable.
Code base consists of approximately two million lines and is singular, requiring one executable to be installed on the client's computer for easy version control.
Multiple instruments can be traded through one platform: including equities, options, futures (forex and bonds - available soon).
All markets can be traded anywhere at anytime
The Matrixsuite is a three dimensional, complete solution - allowing us to service three major market sectors: TradeMatrix - Retail, ProMatrix - Hedgefunds, MarketMatrix - Market Makers. All competing products are two dimensional, offering single point solutions in most cases.
BK: How does your relationship with Thomson Corp work, and what are your other channels to market?
DS: Thomson's companies have invested approximately 8 million dollars into the development of the Matrixsuite. They provided TradePortal with data and certain source code over a period of five years.
TradePortal's other market channels have included marketing relationships with trading notables "Tokyo Joe" and national infomercial campaign with "TrendFund's Waxie, aka Michael Parness"
We are a certified service bureau provider through NASDAQ and we have relationships with outside vendors such as ESP Electronic Trading Specialists, and clearing firms such as CCLS Computer Clearing Services.
BK: Where do you do most of your business - retail or institutional?
DS: Approximately 65% of our current business comes through the retail sector, but with the release of our completed product suite we expect to see the institutional business quickly surpass the retail revenues.
BK: I see that you've received some outside investments -- how is TradePortal backed, and what stage is the company at?
DS: TradePortal is a privately held company that has received both Angel and Corporate Funding. The company is currently at a Mezzanine stage, and is a strong acquisition candidate.
BK: Finally, what are the next steps for the company?
DS: The next steps for TradePortal are to launch a branding initiative through our sponsorship of two TradePortal NASCARS in the upcoming Glen Watkins, New York Busch and Nextel Cup series races. This announcement to over 4.5 million viewers and participants will set the theme for TradePortal's trading software functionality as is relate to speed, power, performance, control and timing. The company is poised to position itself into the Market Making sector, thereby gaining credibility into the highest end user profile of the financial services market. The trickle down impact onto hedge funds will complete the full solution offering that TradePortal alone uniquely possesses in its ability to service all three market sectors from one code base. TradePortal will set up offices in New York, Chicago and Texas in the U.S. and reach out to China through our Japanese base of traders in Tokyo. The company will continue to develop algorithmic trading solutions and refine our automated trading systems including neuro-nets, back-testing and optimization strategies as we more than double our programming staff across three provinces in India over the next six months.