This document summarizes a case study of automating a hedge fund's end-of-day trade summarization process. A financial brokerage firm had hedge fund clients that previously summarized trades manually, which took time and introduced errors. The firm engaged DATA Inc. to develop a desktop application that integrated and automated the summarization process using Microsoft technologies like .NET and SQL Server. The application reduced summarization time from hours to under a minute, ensured consistent and accurate results, and saved the clients and brokerage firm time and money.

1. Client Case Study
Hedging the Process
Automating the
Hedge Fund Trade Summarization Process
www.datainc.biz | 201-802-9800

2. Client Case Study
Hedging the Process
Introduction
Today’s Hedge Funds and their trade related activities span
multiple brokers and trading platforms. Currently, the
technologies behind these platforms are provided either by the Country or Region: New York, NY
financial brokerage firm or consist of multiple off-the-shelf
applications. Traders use these applications to trade and hedge Industry: Finance (Brokerage)
equities and options. At the end of the day these trades are
submitted to the financial brokerage firm for settlement, a Profile: A leading financial services firm that actively
process which is tedious at best and if not completed cor- engages in trading through several major brokerage
rectly, can have adverse effects. The conventional manu- houses throughout the world. al
process that brokers engage in for settlement only increases the
chance for error.
One of DATA Inc’s clients, a global financial brokerage firm, has many Hedge Fund clients who use them as their prime broker. In
the past, these hedge fund clients processed their end of day (EOD) summarization manually, consuming unnecessary time and
resources and increasing the potential for error.
In order to improve client experience, eliminate manual overhead, increase efficiency and ensure consistency in the results, the
brokerage firm required a tool to automate their client’s end of day summarization procedures. DATA Inc. developed a simple, yet
powerful, user-friendly tool to automate the summarization process.
The new custom desktop application integrated and automated the tedious process of EOD summarizations, saving time, money
and reducing errors.
The Challenge
In the past, each trader had their own method of summarizing trade scenarios. Their main focus was to determine the EOD posi-
tion for a symbol held by the client. For this, some of the trade details were left as they were (not summed up or average priced)
which ultimately created inconsistencies in the data and information. In addition, manually updated data and information in a lot
of cases did not take into account prorated commissions nor open and close indicators, further causing disparities in the data and
information.
While on the surface, the immediate answer was to provide a solution to automate the process, the development of such a solu-
tion would have been easier said then done, and additionally, the need to keep costs as far down as possible eliminated the pos-
sibility of using conventional databases and centralized servers for the application.
www.datainc.biz | 201-802-9800

3. Client Case Study
Hedging the Process (...continued)
“The client needed a solution that eliminated the errors and inconsistencies experienced through the manual process” said Denny
Panakal, Senior Project Manager with DATA Inc. “However due to the scope of the project, our choices of appropriate technology
for engagements were slim.”
The Solution
After evaluating various technology approaches DATA Inc. decided to go with a simple desktop-based application approach, with
a stand-alone database engine that specifically catered to the cilent’s need with no network hassle.
DATA Inc. developed the system using a combination of Microsoft-based technology including .NET, which provided an easy-
to-understand user interface. The data store and business layer containing the summarization process was implemented using
Microsoft SQL Server, allowing for ease of installation and configuration on the trader’s desktop computer.
In addition to the selection of the most cost-effective technology platform, the project team of DATA Inc. immersed themselves in
the study of the conventional EOD business process using DATA Inc’s Project Management Solutions System as a central reposito-
ry for accumulating information, developing requirements and ultimately a project plan. This allowed the project team to analyze
the appropriate trade types to develop the solution, eliminating consistencies along the way.
The newly developed application reduced the time for the summarization process down to less than a minute by automating a
multitude of previously manual processes including summarization of similar trades, average pricing splits and if required, close
out of the ‘Start of Day’ position ultimately leaving the remaining trades as Open.
“Microsoft technology, specifically the .NET framework was critical in helping to make this concept become a reality,” says Charles
Rich, Chief Technical Officer and Director of Client Projects for DATA Inc. “The new application can be launched by the click of an
icon, saving brokers time and money when it comes to dealing with end of day summaries.”
The Results
The new Hedge Fund Summarization application brought a drastic business process improvement in the way hedge fund clients
were handling end of day trading activities. Hedge Fund clients embraced the application, reaping the benefits from day one.
There was no overhead for installation and the client found it very simple to use and understand. Ultimately, the system not only
saved the client from spending hours on manual summarization of financial data, but also gave them the confidence that their re-
sults were correct and consistent. “The integration of Microsoft technologies along with a thorough understanding of the tedious
process engaged by the client allowed DATA Inc. to develop a solution that effectively streamlined a tedious and time-consuming
process with Hedge Funds” said Denny. “Our thorough understanding of the financial industry, coupled with our research and
development capabilities allowed us to deliver a solution on-time, under-budget and to great efficiency.”
Find us on Facebook, LinkedIn, and Twitter

4. Client Case Study
Hedging the Process (...continued)
Benefits and Features
• Cost effective
By using .NET and other Microsoft-based technologies, the client did not need to invest in any expensive hardware or en-
hanced software infrastructure.
• No installation overhead:
With no network overhead, and easy-to-follow procedures, the application could easily be installed and configured. The
application is also scalable, whereas when scope and access requirements change, the application can effectively run from a
network platform with all databases in a central location.
• Rich, yet simple User Interface:
Minimal instruction is required for effective use of the application through a rich-yet simple user interface. All processes
present in the interface are self explanatory.
• Ease of use
With just a click of the desktop icon, users can start the process by uploading the input files through a standard windows
interface. The process can then be started by a single click. Upon completion, the output can be saved to familiar formats
such as CSV, DAT, or XLS using Windows file folder control.
• Time Saving
The application provides a summary in less than a minute; a significant reduction in processing time as compared to the
manual process which used to take up to 3 hours based on a day’s trading activities.
• Powerful database
The business logic of the application is implemented using robust and modular database system, ensuring that results are
consistent and delivered fast. Future enhancements can also be easily incorporated into the procedure and rolled out to the
client easily.
• Auditing & Cleanup
The application maintains historic data for desired amount of days for audit purposes. The log tables within the application
help in efficient audit trails of tracing the summarization process done for a trade.
• Consistent and error-free output
The computations are completely automated using a pre-defined set of rules. All practical trade scenarios have been con-
sidered and business rules incorporated, thus rendering consistent results for all situations. A rigorous and thorough testing
www.datainc.biz | 201-802-9800

5. Client Case Study
Hedging the Process (...continued)
process using DATA Inc’s Quality Assurance Methodology also ensured that the application could handle any practical
scenarios.
• Minimal maintenance overhead
Since the application uses a stand-alone database engine, minimal maintenance is required and the cleanup procedures
take care of data maintenance.
• Scalability
The architecture of the application is designed to be scalable, easily accommodating for future enhancements. Any changes
in the database server or file locations are easily configurable and user interfaces can be updated to handle any changes in
the input file format. Changes to the business rules and procedures if needed can also be applied directly into the database.
Technical Details
1. User Interface: Visual Basic .NET running on .NET Framework
2. Business layer and data storage: Microsoft SQL Server
3. Environment:
a. 1 PC with single CPU running Windows XP
b. 1 gigabyte (GB) addressable RAM
c. Can also be configured in a central server and multiple client PC environment
4. Capacity:
Transaction Volume: Can handle up to 1 GB of data
Rate of processing: Execution time depends on the trade scenarios. Typically less than 5 sec for 50KB of data
Database size: Can store 4 GB of data.
Users: Single concurrent user. Can be scaled to multi-user if installed in client-server environment
Find us on Facebook, LinkedIn, and Twitter

6. © Copyright DATA Inc. 2012
This publication and its contents are proprietary to DATA Inc. No part of this publication may be
reproduced in any form or by any means without the written permission of Data Inc.
72 Summit Ave, Montvale, NJ 07645