SALVATORE SFERRAZZA: Hey, everyone.
In this video, I'll talk about the challenges of analyzing
market data in a traditional environment
and how CME Smart Stream with Google Cloud could help.
Risk is defined as a situation involving exposure to danger.
When it comes to the topic of risk,
trading firms are inherently sensitive, especially
in current times where global systems are all being impacted
from market volatility.
They manage risk by collecting signals
from a diverse set of data points
and interpreting them to make timely business decisions.
One key source of these data points
is CME Smart Stream, which delivers a real-time feed
of financial and commodity market data
that traders can use as an input to inform a risk management
strategy.
First, an introduction to CME Group.
CME Group runs exchanges where futures contracts are traded.
For example, a corn futures contract
guarantees a farmer that at harvest time,
they'll get a certain amount of money for their corn,
and guarantees a processing plant
that they'll get a certain amount of corn for their money.
The contract price is the price of certainty.
These contracts work the same way
for corn, oil, or even stock.
To get indications of risk, trading firms
working for the parties constantly
monitor live contract prices.
To do so, exchanges traditionally
send each change in a contract's price
to a trading firm's data center, requiring significant resources
for data storage and analytics.
With CME Smart Stream, that same price data
is delivered in real time to trading firms' Cloud resources.
We selected three personas that care
about the firm's overall risk--
a risk manager, an infrastructure engineer,
and a data scientist.
Let's take a look at each role.
First, the risk manager.
Volatility and information asymmetry
injects uncertainty into the firm's decision process.
Timely standardized market data can help,
but the traditional methods for receiving such data
are oftentimes costly and complex.
In contrast, Google Cloud attaches directly
to CME Smart Stream to store large data sets in our BigQuery
backend and allow analysis through a plethora of options,
including standard SQL.
When combined, risk managers easily
get the visualizations they need while paying for only
the resources they use.
And as a result, there are afforded a real-time view
of exposure that can help them adjust positions and mitigate
risk promptly when necessary.
Next, let's take a look at the data scientist's world.
For trading firms, this area is riddled with complexity.
You've got to acquire, ingest, explore, and analyze the data
all before you can take action.
But Google Cloud allows data scientists
to retrieve CME Smart Stream data,
transform it via data flow, and store it
in Bigtable or BigQuery.
Then, the data scientist can use Google Cloud's AutoML platform
to train and deploy models that predict whether a contract
price will move up or down.
As you can see, she could store, analyze, and visualize
the results with tools that scale, deploy,
and adapt in real time.
Finally, let's look at this from the infrastructure engineer's
perspective.
One of the big problems many firms face
is that inbound financial data traverses
the public internet or a costly private line before ingestion.
As an alternative, Google Cloud offers
managed networking functionality regionally and globally.
This way, the infrastructure engineer
can connect the on-prem or remote resources
to Google Cloud without needing to replicate connectivity
or administrative policies in each region.
Additionally, training firms struggle
with keeping on-prem or even Cloud resources up and running.
As our demo shows, this problem could be
managed simply and effectively.
We start by leveraging terraform descriptive
deployment of our microservices architecture.
This architecture allows us to containerize our application
components, while making it easier
to support CI/CD pipelines.
Terraform enables the automation of infrastructure
making infrastructure easily auditable
for any governance need.
And that's it.
In this demo, we showed you how risk managers, data scientists,
and infrastructure engineers can easily
manage risk in the Cloud using real-time market data.
We hope you found it useful.
For more about everything we've talked about,
check out the links in the description below.
And don't forget to subscribe to our Google Cloud YouTube
channel for more great content.