OTC Trading System

Customer

Swiss Capital Group — an independent specialist in Corporate Finance and Asset Management, focusing primarily on alternative investments and structured products. The company is regulated by the Swiss Federal Banking Commission.

Challenge

Swiss Capital Group addressed Sunbay to develop an over-the-counter option trading system. The system was intended to be an online market place where professional brokers place ask and bid quotations for options. All business transactions are conducted through a telephone or computer network. The system is not used for financial transactions.

Solution

In 10 months Sunbay has developed a software solution called OpenOTC. It was done as a multi-tier message-oriented system, using Java on the server and client sides.

The Server side is based on BEA WebLogic Application Server using EJB 1.0, JMS as a message-delivery layer.

As not all banks use JDK 1.2 plug-ins, two versions of the Client side were developed. Both are designed as Java applets. The first one uses JDK 1.1 and Abstract Windows Toolkit (AWT) for the Client UI. The other one uses JDK 1.2 that enables Swing for the UI.

One of the main points of OpenOTC is multi-parameter characteristics of the options. This allows to find correspondence between asks and bids not only according to the price but based on all input criteria. When such corresponding options are found by the system both parties are informed and trading starts. During the process some option parameters can be changed in real-time.

All communications between the users can be done via OpenOTC or using traditional means of communications: phone, e-mail, etc.