In the last installment of our five-part series on finding the right data partner we explored provider service models and stability. Now, let’s delve into another crucial aspect: the total cost of ownership (TCO). Understanding TCO is vital when considering the complexities and costs associated with obtaining, managing, and supporting an options data infrastructure. 

The Complexity and Cost of Options Data Infrastructure 

Options data infrastructure is not just a simple matter of data access; it’s an intricate ecosystem that requires substantial investment in both technology and human resources. The costs involved are multifaceted.  

For instance, exchange fees vary depending on whether you need end-of-day, delayed, or real-time data, and each type of data access incurs different costs, requiring accurate budgeting. Additionally, connectivity fees are influenced by your existing systems’ capabilities and the specific requirements of options data delivery. Upgrading or adapting your infrastructure to meet these needs can be expensive. 

Evaluating Capabilities and Costs 

However, beyond these direct costs, the real challenge lies in evaluating the comprehensive capabilities a partner offers and how these contribute to the total cost. 

 Handling options data effectively requires a highly educated and specialized team. Building this expertise in-house involves significant expenses in hiring, training, and retaining talent. Moreover, modeling calculations and warehousing large data sets require robust hardware and infrastructure, leading to substantial capital expenditure. Many trading organizations struggle to excel in all aspects of options data management when relying solely on in-house resources. Similarly, many options data providers focus narrowly on data or technology without offering comprehensive modeling capabilities.  

Achieving success in the options market requires excellence across the entire data stack, which can be challenging and costly to achieve independently. 

The Benefits of Outsourcing to Specialized Partners 

Outsourcing these costs to a specialized partner’s platform offers significant advantages. By leveraging a partner’s existing infrastructure and expertise, organizations can materially drive down costs. This includes savings on hardware, software, and human resources.  

Specialized partners bring in-depth quantitative expertise, which is crucial for effective data modeling and analysis. This not only saves costs but also enhances the quality of insights and decisions. Furthermore, a partner that goes beyond providing raw data to offer data wrangling and quantitative modeling can dramatically reduce processing time. This efficiency translates into a higher return on investment, leveraging both skill and scale. 

The SpiderRock Advantage 

One of the biggest challenges organizations face today is managing an overwhelming amount of data. Many still rely on evolving work processes that may not fully adapt to the demands of big data. SpiderRock is designed to address this pain point effectively. SpiderRock offers custom-built solutions tailored to meet organizational needs. However, it’s crucial to ensure these tools fit well with your specific requirements to avoid potential vendor lock-in risks.  

While some organizations may have the capability to perform analytics and data manipulation in-house, the opportunity costs can be high. The infrastructure and human capital costs associated with managing large data sets can be prohibitive. By partnering with SpiderRock, organizations gain access to critical analytical knowledge at a far lower cost. This partnership provides a comprehensive solution that encompasses data access, manipulation, and advanced modeling. 

Conclusion 

Understanding the total cost of ownership is essential when selecting a data partner. By outsourcing to specialized partners like SpiderRock, organizations can achieve significant cost savings, efficiency gains, and superior analytical capabilities. This strategic move not only reduces the complexity and costs associated with options data infrastructure but also positions organizations for greater success in the competitive options market.

About SpiderRock Gateway Technologies  

SpiderRock Gateway Technologies (“SpiderRock”) is the data and analytics division of SpiderRock Technology Solutions, a provider of industry-leading options trading solutions. SpiderRock is an exchange-licensed redistributor of market data, providing US stocks, options, and futures market data in a raw and normalized format. SpiderRock’s proprietary live analytics offer low-cost delivery of market data and options analytics without requiring clients to make a significant investment in infrastructure.   

For more information, please visit www.spiderrock.net/data, follow us on Twitter at @SpiderRockChi, and visit our LinkedIn Page. 

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