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Digital Subscriptions > The Hedge Fund Journal > Issue 106 - August 2015 > The Risks in Electronic Trading Platforms Agreements

The Risks in Electronic Trading Platforms Agreements

What concessions can you expect from vendors

The electronic trading platforms you use for your fund are like the utilities for your home. Your house needs electricity to run your appliances, and your fund needs electronic trading platforms (ETPs) to execute and settle your trades. Like an electric company, the ETP vendors make their services available to all takers, usually on a take it or leave it basis. Vendors have little desire to negotiate the terms of their services with any except the biggest market players. What this means is that you’ll likely end up with contracts that offer you little protection, but offer tremendous protections for the vendors.

Turning off your electricity is not a realistic option if you are unhappy with your electric company – so too are you stuck using ETPs. So, if you cannot negotiate away the risks, you should at least understand what they are and how you might mitigate them.

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About The Hedge Fund Journal

INFORMING THE HEDGE FUND COMMUNITY With access to some of the industry’s biggest names and an astute and talented group of writers and contributors, The Hedge Fund Journal has established itself as a trusted source of information on the hedge fund industry. Highlights of Issue 106: Championing Customization: Amundi Alternative Investments Tackling UK Farming’s Funding Shortfall: Helping reform UK’s agriculture and alternative energy industries Shareholder Activism as Private Equity Allocation: The resurgence of the strategy a decade after first rising CME Group Crude Oil Spread Options Suite: Volumes advance with screen-based trading growing fastest Adding Dynamic Beta to Double Alpha: UBS Equity Opportunity Long Short UCITS