The benefits of a margin engine for brokers and hedge funds

Author: Ivan Egorov

This week, we want to talk about the margin engine, its working principles, and its benefits for both hedge funds and brokerages.

What is a margin engine?

A margin engine is a component built into the Trade Processor liquidity bridge that allows you to process orders straight through the FIX API without any trading platform. This eliminates an extra step and also requires you to work with one less console.

What are the benefits of a margin engine?

A margin engine is an excellent solution for all brokers and hedge fund managers that don't have a trading platform, but also for prime brokers who want to provide liquidity to professional traders and other market participants.

Here are the main advantages of a margin engine:

• The execution route is shorter (because there is no trading platform in between), so orders are executed faster.
• Unlike with trading platforms, there is no limit on the number of accounts in the margin engine, so brokers and hedge funds don't have to worry about reaching a limit once their customer base starts growing.
• The margin engine allows dedicated margin accounts in the Trade Processor web interface for FIX clients to monitor their net exposure, margin, and positions in real-time.

Who is the margin engine for?

The primary audience for the margin engine would be brokerages and hedge funds that do not have a trading platform or any other margin engine. It enables them to trade directly with Liquidity Providers via the FIX API.

All Liquidity Providers (LPs) are connected directly to the Trade Processor liquidity bridge, so if the broker or a hedge fund want to add or change their LP, there is no integration or adaptation required on their end. It means that clients just need to integrate with the Trade Processor once, and they will unlock access to 70+ Liquidity Providers via the bridge.

Anyone can work with a margin engine to speed up the execution process and enjoy faster trades and better pricing.