What is a Single-Dealer Platform?
If you would like to read a more detailed discussion of single-dealer platforms please download Caplin's Single-Dealer Platform white paper.
Definition of a Single-Dealer Platform
A multi-dealer platform is a trading venue for a particular type of asset class, FX for example, which presents prices from, and the opportunity to trade with, several dealers.
In contrast, a single-dealer portal is an internet portal which presents prices from, and the opportunity to trade with, only one dealer.
So a single-dealer platform (SDP) is the technology infrastructure on which a single-dealer portal runs, although increasingly the term single-dealer platform is used to describe both the technology infrastructure and the resulting trading application.
You can read more about single-dealer platforms on Wikipedia.
Single-Dealer Platform Features
By choosing, and building upon, the correct set of technology, a single-dealer platform can span multiple asset classes, integrating them together in the client application.
Taking this one step further, by choosing the right underlying framework it's not only possible to offer prices for, and trading in, multiple different asset classes, but also to design client applications designed for different types of user.
So you could have, for example, one interface for internal sales traders, a different one for hedge-fund managers and yet another for active FX traders.
These could all be operated on top of the same single-dealer platform which has suitable interfaces to your internal trading, pricing and permissioning systems in multiple asset classes.
Caplin provides a framework to investment banks that enables them to quickly build, or enhance, their single-dealer offering, or to create a single-dealer platform for the first time.
Caplin's Single-Dealer Platform Framework: Caplin Platform
Caplin Platform is easily implemented for an initial asset class, usually FX, and is then easily extensible to include other asset classes. This flexibility means that your trading application can be extended quickly and easily to meet changing business requirements or market conditions.
Our customers currently provide a whole range of instrument classes in their single-dealer platforms, including: FX cash, FX futures and options, Rates, Structured products, IRDs, Equities and F&O.
Caplin Platform is normally paired with Caplin Trader to deliver native web apps built in HTML5 and Javascript. However Caplin Platform supports a wide range of alternate client-side application technologies including Flex or Silverlight, locally installed applications typically written in Java or .NET, Apple's native iOS to support Apple iPhones and iPads, through to direct APIs that connect the single-dealer platform to a client-side remote application.
- White Papers
- Single-Dealer Platforms
- Implementation Partners
- Technology Partners
- Management Biographies
- About Caplin
Why build an SDP?
Building a single-dealer platform allows you to build a direct electronic relationship with your customers, realising substantial benefits compared to either trading via a multi-dealer platform or voice trading. In particular you can reduce your costs and increase your revenues while accruing other less tangible benefits.
Reduce Costs
There are various ways of reducing your costs compared to trading either over a multi-dealer platform or voice trading with your customers. These include:
- Reduce brokerage fees compared to multi-dealer platforms
- Reduce cost and time of on-boarding new clients
- Move low-margin business away from voice trading
- Release sales staff to deal with high-margin business
- Internalise trades that are currently going outside your firm
- Consolidate or remove redundant systems
Increase revenues
A single-dealer platform can increase your revenues in a variety of ways, including:
- Increase your customer base
- Identify and monetise relevant research
- Increase trade volumes
- Cross-sell products
- Increase share of client wallet
- Increase profitability per trade
Other benefits
There are also further less tangible benefits of a single-dealer platform, which include:
- Building your brand
- Defending your franchise from competition
- Improve your business agility, allowing you to:
- Introduce new products
- React to market developments
- Respond to changing regulations
- Feed real-time trade information into your risk system
- Change internal trading, pricing and research systems without impacting clients
If any of these ideas are relevant to your situation, but you need help building your business case to initiate your single-dealer platform project, or to justify budget allocation, please contact us - we have substantial experience of building real-world business cases and will be happy to help you.
