TradeStation Group, Inc. (NASDAQ: TRAD) $307M (MarketCap) Extending Trader's Back-Testing Capabilities

TradeStation Group, Inc

TradeStation Group, Inc. (NASDAQ: TRAD) $307M (MarketCap) Extending Trader's Back-Testing Capabilities

Sure, there's a lot of online brokerage accounts and trading platforms for the retail investor to choose from, and many come with flashy components and features butTradeStation Group offers something a little more different: a trading platform with a focus on complete customizability and the ability to design, test, and monitor trading strategies and automate them with electronic order execution, positioning the company to compete with bigger brokers and maximizing shareholder values.

I wrote agreat article after interviewing TradeStation's chairman and chief executive officer, Salomon Srendi, and John R. Roberts, chief operating officer who spoke on the business of rule-based trading platforms and what it takes to be the world's best provider now would be a good time to read that article and better understand TradeStation and why this article is important.

When I spoke to Mr. Srendi, he indicated that TradeStation would be rolling out new features and a new design that kept the foundation of rule-based trading strategies and techniques. He also mentions he saw great potential for the Forex market to leverage the company's software and create attractive systems for traders. They have been able to sock away $120M as of March 31st, 2010, or about $3 per share in cash and U.S. Treasuries - nearly four and a half times this quarter's sales, and likely with those savings, announced a software product acquisition today that will be integrated into the company's platform.

TradeStation today announced its acquisition of the Grail System "walk-forward" and "strategy builder" software technology and business from its inventor, Wouter Oosthuizen, and his company, Technovest (Pty) Limited. The products acquired include Grail Walk-Forward Optimizer, Grail Genetic Optimizer and Grail Computer Assisted Strategy Builder, together with all other products, enhancements and new features currently in development. These products will be seamlessly integrated with TradeStation's award-winning, industry-leading trading strategy design and back-testing and automation platform. Both walk-forward testing and a broad strategy builder offering have been a company priority for TradeStation for some time, as the company has long realized that the potential value of its strategy design, back-testing and automation platform could rise dramatically with the addition of these tools to create and optimize back-tested trading strategies.

"The Grail's Strategy Builder," says John Bartleman, VP of product development "will significantly help traders build new strategies from scratch without the need for custom EasyLanguage(R) programming. Using genetic algorithms, the trader will have the ability to scan through millions of strategy permutations in a relatively short period, identify those strategies he believes show potential, and then submit them to the Grail Walk-Forward Optimizer to test their robustness."

With the deal also comes Mr. Oosthuizen, the Grail's builder, as he will be joining the company full-time at its Florida headquarters on October 1, under a three-year employment agreement to help lead the efforts to enhance the technology and seamlessly integrate it with the TradeStation platform.

Other notable TradeStation points of interest:

Profits have been attained for 30 consecutive quarters, and annual net income increased by at least 7% and as much as 141% year-over-year from 2004 to 2009 during a period when interest rates declined to virtually 0%.

New account openings increased in the 2010 first quarter by 7% year-over-year to a new total of 47,026 total brokerage accounts, while DARTs decreased by 24%; still a heavy outperformance when compared to competitors.

To view this article at World Market Media click on the link below: http://www.worldmarketmedia.com/779/section.aspx/1861/post/tradestation-group-inc-nasdaq-trad-307m-marketcap-extending-traders-back-testing-capabilities

Disclosure: no positions

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