Five Minutes With James P. Marzano

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James P. Marzano has been around the interest rate product scene for some time. By Marzano's account, he made the first bond futures trade on the Chicago Board of Trade bond floor on Aug. 15, 1977. Now he's trying to get a new product for his trading application company - Applied 360 - off the ground. Marzano recently sat down with MarketsWiki Editor/Producer Christine Nielsen to talk about his current areas of focus.

This month, Marzano is launching Metrixx360, a product which Marzano describes as a real-time trading decision and support application that provides professional traders, hedge fund managers and portfolio risk managers with the calculation tools and market analysis necessary to support trading strategies and complex algorithmic trading applications. Metrixx360 is being launched this month to a select group of large traders that will act as beta test users. The full release of the product is slated for January of 2011.

"Our team has been putting the finishing touches on Metrixx360 as we roll it out with CQG, and in early next year with Trading Technologies," Marzano says.

According to Marzano, Metrixx360 calculates all the critical relationships in the derivative markets which are usually rooted in the cash - futures basis in the spreads and intermarket spreads. The philosophy is that a trader needs to understand the impact of interest rates in any market that he or she trades.

"The people who seem to live the longest in the derivatives markets are the spreaders." To be able to do that, you need to understand the cost of money, Marzano says.

Marzano spent over 24 years as a member of the Chicago Board of Trade and the Chicago Mercantile Exchange. Along the way, he was chair of the municipal futures contract, financial instruments executive committee and business conduct committee.

He founded First LaSalle Services, Inc., a clearing member firm of the Chicago Board of Trade and the Chicago Mercantile Exchange. In the mid 1980s Marzano got more involved in system development. He was responsible for the founding and development of the Applied Municipal Network, an early contributor of data and synthetic price algorithms to Bloomberg; the Allport Portfolio System, which was in operation at CNA Insurance for over 20 years; and the development of Insignis, an investment management service in production for over a decade at large institutional investors including the General Motors Investment Management Company, the California Public Employees' Retirement System (CalPERS), JPMorgan Chase, and Indosuez Carr (which is now Newedge).

Marzano calls Metrixx360 a "culmination of what I've done in clearing, financing, arbitrage" of the experiences in these markets. Metrixx360 is available to subscribers of CQG and is expected to be available through other trading service providers in the future. Further, the company's "endgame is to use this technology to price OTC swaps," Marzano says.