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LSE Breaks World Record In Trade Speed With Linux

timothy posted more than 3 years ago | from the linus-mentioned-their-startling-speed dept.

Businesses 452

LingNoi writes with this excerpt from ComputerWorld UK: "The London Stock Exchange has said its new Linux-based system is delivering world record networking speed, with 126 microsecond trading times. The news comes ahead a major Linux-based switchover in twelve days, during which the open source system will replace Microsoft .Net technology on the group's main stock exchange. The LSE had long been criticised on speed and reliability, grappling with trading speeds of several hundred microseconds. The 126 microsecond speed is 'twice as fast' as its main international competitors, the London Stock Exchange said. BATS Europe and Chi-X, two dedicated electronic rivals to the LSE, are reported to have an average latency of 250 and 175 microseconds respectively. Neither company immediately provided details. But many of the LSE's older and more traditional rivals offer speeds of around 300 to 400 microseconds. Nevertheless, Linux is now standard in many exchanges, including the New York Stock Exchange."

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Java? (0)

Anonymous Coward | more than 3 years ago | (#34009184)

They swaped java for .Net. Yay! Maybe they should use something like Erlang and Unix ...

Best for headshots (3, Funny)

Anonymous Coward | more than 3 years ago | (#34009198)

Windows games: Plentiful and well developed. Mac games: Barely existent. Linux games: Lowest latency.

Not just useless, but actually toxic. (5, Insightful)

QuoteMstr (55051) | more than 3 years ago | (#34009200)

Trades that happen this fast are only good for further enriching large investment firms that can afford to spend millions on clever algorithms for shuffling numbers around. This speedup lets these companies make even more money without creating one damned thing that's useful to any living person.

Limit trades to one per second per institution, and while you're at it, add that tiny per-trade tax. Finance should be boring. Let's encourage people to focus on the real economy that operates in the world inhabited by you and me.

Re:Not just useless, but actually toxic. (0)

Anonymous Coward | more than 3 years ago | (#34009226)

Haven't you heard? HFT is all about increasing the liquidity of the stock market.

You should be glad teh computars are making it so easy for you to buy and sell.

Re:Not just useless, but actually toxic. (3, Interesting)

buchner.johannes (1139593) | more than 3 years ago | (#34009234)

Can someone explain to me what the system does in these 126 microsecond? Is it sending packets through the world, doing some complicated calculations, solving locking resources? It seems an awefully long time to add to a table and update some stats.

Re:Not just useless, but actually toxic. (5, Funny)

Ethanol-fueled (1125189) | more than 3 years ago | (#34009252)

The idiots in charge of the stock markets believe that, since Linux doesn't crash, their stock markets won't either.

Re:Not just useless, but actually toxic. (4, Funny)

Anonymous Coward | more than 3 years ago | (#34009306)

The idiots in charge of the stock markets believe that, since Linux doesn't crash, their stock markets won't either.

And if Linux crashes, Linus will give you a full refund.

Re:Not just useless, but actually toxic. (0, Insightful)

Anonymous Coward | more than 3 years ago | (#34009312)

Now the LSE can crash twice as fast as its competitors..

Re:Not just useless, but actually toxic. (1)

dimethylxanthine (946092) | more than 3 years ago | (#34009390)

Where is the FUD button?

Re:Not just useless, but actually toxic. (5, Insightful)

LingNoi (1066278) | more than 3 years ago | (#34009576)

It might crash but at least it won't have an 8 hour down time like their previous windows based system had. Oh, and you can forget about the imaginary support you'll get with that windows license as the London stock exchange found out the hard way.

Re:Not just useless, but actually toxic. (5, Informative)

Anonymous Coward | more than 3 years ago | (#34009302)

It is the time measured from when a bid/ask order is sent from the customer's network port, until it has been processed/stored and possibly matched at the Exchange, and back again.

Re:Not just useless, but actually toxic. (1)

ikkonoishi (674762) | more than 3 years ago | (#34009326)

Lots of data going in lots of data going out. Millions of people make trades on this thing constantly.

Re:Not just useless, but actually toxic. (1)

nacturation (646836) | more than 3 years ago | (#34009430)

Can someone explain to me what the system does in these 126 microsecond? Is it sending packets through the world, doing some complicated calculations, solving locking resources? It seems an awefully long time to add to a table and update some stats.

One eighth of a millisecond is an awfully long time?

Re:Not just useless, but actually toxic. (0)

Anonymous Coward | more than 3 years ago | (#34009540)

Well it is 250000 cycles on a 2 GHz machine

Re:Not just useless, but actually toxic. (1)

davester666 (731373) | more than 3 years ago | (#34009536)

It increases the time delta between when your broker trades the stock up a little, then puts through your trade by selling you the stock he just bought, but for a little more than what he bought it for. Every time.

Re:Not just useless, but actually toxic. (3, Interesting)

mpoulton (689851) | more than 3 years ago | (#34009292)

Trading this fast brings the market closer to optimal economic efficiency, where prices at any instant accurately reflect value. Latency contributes to the very inefficiencies that you blame these "large investment firms" from profiting off of. These high-speed arbitrage and "quant" investors may make a profit without creating a product (though collectively their track record is not very good financially), but their profit margins are vanishingly small and they serve a critical role in equalizing prices between markets and keeping prices up to date as market conditions change. In short, your complaint about these trading practices smacks of jealousy and sour grapes, and it ignores the valuable role they serve in the markets.

Re:Not just useless, but actually toxic. (5, Insightful)

dakameleon (1126377) | more than 3 years ago | (#34009334)

I respect your optimism and idealism when it comes to these things, but Index Arb desks are making some of the most effective, near-risk-free profits for the big banks, and it's little wonder the LSE wants to be at the forefront of this market. You don't have to pay a computer a bonus, and the programmers behind this hardly see the same kind of money as the big swinging dick traders who try to spot the macro inefficiencies. Furthermore, the same strategies and speed advantages are used for algo traders to allow big blocks of trades to go through as best possible without shifting the market, making more cash when the trades are billed to the client at a weighted average instead of the true cost.

But then you don't see these numbers in the breakdown of the Goldmans profit numbers, and you never will. In the casino of the share market, the dealer is helping the sharks fleece the sheep.

Re:Not just useless, but actually toxic. (0)

Anonymous Coward | more than 3 years ago | (#34009346)

Hell yes! Now we can fat-finger flash-crash twice as fast.

Re:Not just useless, but actually toxic. (5, Insightful)

NoSig (1919688) | more than 3 years ago | (#34009352)

I can't tell if you are are someone defending your own work to assuage your conscience or a troll pretending to do so, but anyway: There is no value to equalizing prices in less than a second, especially when the "equalizing" you are talking about is really just pocketing the difference. The only value there would be in equalizing prices in less than a second would precisely be to remove the threat that these people pose. Since sub-second trades are necessarily automated trades, they also cannot be doing anything sensible to keep prices up to date as real world conditions change, as that requires understanding the real world which an automated system cannot. They serve only the function of increasing profits for their investors - how little or how much damage they cause in the course of that is what is debatable.

Re:Not just useless, but actually toxic. (5, Informative)

atomic brainslide (87546) | more than 3 years ago | (#34009454)

while in theory your idea is correct, the harsh reality is that in practice, the large investment firms increase their profits drastically because there are actually two markets. this isn't strictly legal, but it's there. the large firms have dedicated connections to the exchanges with guaranteed SLAs and lower latencies than any other regular participant in the market. this allows them to stuff the buy/sell queues and rapidly cancel orders before they go through. the purpose of this is to deduce other bidders' price points and gain an edge. there are a number of such hedge funds (and even a major bank whose name escapes me), for example, that have had perfect trading days for over a year. statistically impossible outcomes like this only come from gaming the system in the above mentioned manner. as usual, the regulators are asleep at the wheel and the markets become more volatile week to week with increasing flash-crashes exactly because of these schemes. more efficient markets these are not.

Re:Not just useless, but actually toxic. (1)

Mitsoid (837831) | more than 3 years ago | (#34009534)

This sounds interesting, can you please provide a citation for those who wish to research?

Re:Not just useless, but actually toxic. (1, Informative)

Anonymous Coward | more than 3 years ago | (#34009626)

Just from some quick Googling:

100% perfect trading streak [istockanalyst.com]

61-day perfect run [nytimes.com]

There are some in-depth analyses of the "Flash Crash" recently, for instance at:

Flash Crash Analysis [nanex.net]

Re:Not just useless, but actually toxic. (5, Insightful)

MyFirstNameIsPaul (1552283) | more than 3 years ago | (#34009556)

The regulators are not 'asleep at the wheel'. They are playing their historic role of do what the boss tells you, and if the boss doesn't tell you to bust one of the huge firms, you don't. If the regulators are incapable of protecting the small investors, then get rid of the regulators, but don't blame the technology. Your assumption that the market is more volatile today than ever before is weak. Take a look at the Dow in the 30s.

Re:Not just useless, but actually toxic. (2, Informative)

nacturation (646836) | more than 3 years ago | (#34009522)

Trading this fast brings the market closer to optimal economic efficiency, where prices at any instant accurately reflect value. Latency contributes to the very inefficiencies that you blame these "large investment firms" from profiting off of.

The faster the trades, the greater the disparity between how fast a normal Joe investor can trade vs. how fast an investment firm plugged directly into the exchange can trade. Let's say I'm down the block and my ping times are an awesome 6 milliseconds. A large investment firm plugged into the exchange might have a ping time of 1 millisecond (I'm being quite conservative here), even 1% increase in benefit I see the investment firm is going to see a 6% benefit.

Yes, they play a role in equalizing market prices (more power to them) but they can also profit from the fact that ordinary investors are acting on information that is outdated because they are unable to receive the information as fast as the large institutions can. The greater trading speed only increases this disparity.

clearly not: prices are chaotic, fractal, etc. (5, Insightful)

r00t (33219) | more than 3 years ago | (#34009528)

Prices are discrete, quantized, non-differentiable, etc.

Prices are chaotic and somewhat fractal.

Going faster does not solve this. Think of sign(sin(1/x)) as x approaches zero; it changes rapidly but this doesn't make it smooth.

Hourly trades would be reasonable. You get a few minutes to submit secret bids, the exchange gets nearly a half hour to match them up, the exchange gets a few minutes to publish results, and you get nearly a half hour to decide on your next bid.

There is no reason that the finances of normal corporations and normal investors should be subjected to the abuse of today's stock market.

Re:Not just useless, but actually toxic. (1)

harlows_monkeys (106428) | more than 3 years ago | (#34009542)

Trading this fast brings the market closer to optimal economic efficiency, where prices at any instant accurately reflect value

I doubt this is true for real markets. Value ultimately comes down to human reactions to events in the real world, and how that affects our demand for goods. Since human perception speed and decision time is limited, I expect that there is some maximum trade rate, beyond which the market ceases to be optimal (if we measure optimality in terms of producing efficient allocation of real-world resources) and starts reacting to itself. I suspect that this is one of those areas where to get an optimal result, you need to inject some noise into the system (add random latency to trades).

Re:Not just useless, but actually toxic. (5, Insightful)

Tom (822) | more than 3 years ago | (#34009566)

Trading this fast brings the market closer to optimal economic efficiency, where prices at any instant accurately reflect value.

It might, if the trading were actually being done at the exchange, for market prices. It isn't. Most trading today is only registered at the exchange, but the actual deal is brokered elsewhere.

Also, the amount of liquidity a market needs is subject to discussion. Do you really need to have a counterpart available this second for a market to work? That is nonsense, the market (the real market, not the speculative one) wouldn't burn and die if you had to wait a second or two or even *gasp* five for a deal to go through.

Providing liquidity is a valuable role. However, you are ignoring the fact that everyone is in it for the money. If the cost of liquidity, i.e. the amount of profit the high-speed traders extract from the market, becomes too high, the market also suffers. Somewhere, there is an optimal point between the positive (more liquidity) and the negative (the cost of this liquidity).

Re:Not just useless, but actually toxic. (5, Insightful)

hughbar (579555) | more than 3 years ago | (#34009586)

There's a huge problem with the word 'value' in the above.

To declare interest, I'm ex-investment banking and not too proud of it. The 'values' and 'derivatives' exchanged are often not mapped to anything happening in the 'real' world [think manufacturing, [useful] services even], however they do have a negative impact on it [factory closures, bank bailouts paid by the taxpayer, for example].

Try a thought experiment, does anything useful change in 126 microseconds? Bread get baked? Pizza cooked? House built? Seed planted, if you want to get rural and idyllic?

Incidentally, I'm not against simple futures, for example, they smooth the farmer's year and have a purpose. I am pretty much against most exotic financial derivatives and against short-term [126 microseconds, for example!] 'investment' to use ironic quotes...

Planet Money (2, Interesting)

VValdo (10446) | more than 3 years ago | (#34009588)

Trading this fast brings the market closer to optimal economic efficiency, where prices at any instant accurately reflect value. Latency contributes to the very inefficiencies that you blame these "large investment firms" from profiting off of.

Let's just relax and listen to this episode of Planet Money on high-frequency trading [npr.org] .

I know. It's NPR. They fired Juan Williams. Whatever. (FWIW: on the Diane Rehm show from Friday, they defend Williams, say there was a "rush to judgement" and say that NPR went "off the handle" [youtube.com] . You'd NEVER see most news employees do that on-air.)

W

Re:Not just useless, but actually toxic. (0)

Anonymous Coward | more than 3 years ago | (#34009648)

Markets are vulnerable to runaway positive feedback effects, causing, for example, something to lose value just because it is losing value. How fast these runaway effects happen, and thus how far they can proceed before conteracted by other factors, depends on the trading speed. Therefoe, these fast, automated trades make the market less stable.

1 per second? Not even that (1, Interesting)

Anonymous Coward | more than 3 years ago | (#34009310)

Stock trading should be at least limited to speeds that humans operate at, which is more than one second. Hell, I think that large, industrial companies' stocks could well be traded once a month or so (especially they shouldn't be traded immediatelly after quarterly reports, to prevent idiotic panic reactions). New software companies... Perhaps once a day? Stock trading is supposed to be long term investment based on how the companies are doing, not automized microsecond manipulation.

That said... Who am I to say that people shouldn't be allowed to throw their money to that stupid system if they so want to do? Rather, we should make the society less dependant on that... So that the next time the market crashes (which it periodically does), it doesn't take the rest of the society down with it.

Re:1 per second? Not even that (1)

NoSig (1919688) | more than 3 years ago | (#34009368)

That's interesting. Whenever vital information about a company is known to come out, the stock of that company should not be tradeable until sufficient time has passed for a human to reasonably process the information.

Re:1 per second? Not even that (2, Insightful)

skegg (666571) | more than 3 years ago | (#34009500)

For those who may not know, these are known as trading halts [wikipedia.org] .

What makes me furious is looking over historic share price graphs and observing share prices rise a day or so *before* a company makes a positive announcement (e.g. a huge mineral find, scientific breakthrough, profit increase, etc).

Re:1 per second? Not even that (1, Insightful)

The Mighty Buzzard (878441) | more than 3 years ago | (#34009464)

The thing is, if people don't have the freedom to be both panicky idiots and greedy fuckers who're happy to take advantage of that, they're not free at all. Freedom is the government leaving alone unless you're screwing with someone else's freedom; only letting you do what's morally right by their standards is the basis for most oppression.

So, yeah, let them make money off people who aren't as good at stock trading as fast as they like. Doing otherwise would basically be telling them they're not allowed to make any more money because you find the amount they already have distasteful. Pretty much 100% sour grapes.

Re:1 per second? Not even that (4, Insightful)

The Master Control P (655590) | more than 3 years ago | (#34009622)

The idea of government only preventing someone from directly interfering with the freedom of others sounds great until you realize that (1) everything everyone does affects everyone else, so the only way to actually satisfy this constraint is for everyone to do nothing, (2) not only is it possible to harm people through second-order and higher effects, that's the overwhelmingly dominant means by which people in industrialized countries come to harm today, so relaxing the constraint to not directly harming others is effectively useless, and (3) the relationships between cause and effect are, a large majority of the time, of such high order that accurately and objectively assigning blame/responsibility for harm is effectively impossible. The world is vastly too complex to be effectively managed by an idea so simplistic or black & white.

Absent the availability of a superhuman-class intellect that's both able and willing to solve the optimization problem, we settle for global stability constraints. Stamping out actions whose only tangible effect is to crash whole stock markets so hard the operators hit the big red "Shut. Down. Everything." button sounds like a damn fine constraint to me. Or, "your freedom to be a greedy dick or a panicking moron ends where the viability of the world's economy begins."

Re:Not just useless, but actually toxic. (3, Insightful)

1s44c (552956) | more than 3 years ago | (#34009412)

Much as I'm sure that Linux will perform faster and with far more stability than Windows in all given applications the parent is spot on here.

More speed isn't the answer here, less speed is needed. If anyone wants to buy and sell little bits of companies at those kinds of speeds they clearly have no interest whatsoever in the companies they are trading. They can only be gaming the system for unearned gain.

Investment bankers ( and I don't mean real investors ) are parasites on the capitalist system and anything that enriches them impoverishes someone who works for a living.

Software Only? (3, Insightful)

ticklish2day (575989) | more than 3 years ago | (#34009212)

Is this improvement purely because of the change in software technology or were there simultaneous infrastructure and process modifications? The article doesn't really say.

Re:Software Only? (1)

Anpheus (908711) | more than 3 years ago | (#34009300)

It's my understanding that it's also all new hardware.

Anonymous Coward. (1, Funny)

Anonymous Coward | more than 3 years ago | (#34009218)

Your post was fast... are you using Linux?

Linux: 1, MS: -1 (2, Interesting)

ThePromenader (878501) | more than 3 years ago | (#34009232)

Not so sure that the networking speed is due only to the Linux OS switchover - The LSE obviously updated its hardware too.

I'd be really be interested in the makeup of the LSE network support - do they rely on their own developers/deployers, or do they have a support deal with Linux?

Re:Linux: 1, MS: -1 (1, Insightful)

RightSaidFred99 (874576) | more than 3 years ago | (#34009270)

Yeah, probably to people who don't know a lot about software you've summarized it.

For the rest of us, we know that architecture matters more than platform, and that barring extremes of performance requirements it also matters more than native code versus non-native code.

Since this is an extreme range of performance (in terms of latency), .NET was a poor choice - Java running on Linux with the exact same architecture would have performed as badly or worse.

Fanboys will pretend this means something in the Linux versus Microsoft debate, when in fact it means absolutely nothing other than that whoever implemented their last version was retarded and delivered a horrible product.

Re:Linux: 1, MS: -1 (5, Insightful)

Sean Hederman (870482) | more than 3 years ago | (#34009488)

The software was written by Accenture with assistance from Microsoft, so that would tell you all you need to know.

Re:Linux: 1, MS: -1 (1)

RightSaidFred99 (874576) | more than 3 years ago | (#34009630)

That tells me nothing.

Nobody clearly pointed out what the problem was with the original solution. It crashed, so what. Generally software crashing is because the application developer created a bug or there was an unforeseen event. This has nothing to do with Microsoft Versus Linux.

Now this new system, on new hardware, probably running natively compiled code and highly performance optimized runs faster than a .NET solution. Wow! Quick, call the press!

You're jumbling together a bunch of different dimensions of a solution and lumping them all into "Durr, Linux > Microsoft, this proves it!!".

Anybody with a lick of sense realizes how retarded your crowing over this is.

Re:Linux: 1, MS: -1 (0)

Anonymous Coward | more than 3 years ago | (#34009646)

The old software was written be Accenture. The new software was written by a development house (Millenium IT) bought by the LSE.

Re:Linux: 1, MS: -1 (2, Interesting)

JohnFluxx (413620) | more than 3 years ago | (#34009490)

If you call Microsoft fanboys, then sure. Microsoft did a huge ad campaign about how the LSE switched from Linux to Windows, proving that Microsoft was ready for the big time.

Re:Linux: 1, MS: -1 (1)

LingNoi (1066278) | more than 3 years ago | (#34009274)

I found this further into some other links about it.

At the time the LSE maintained that TradElect was not responsible for the outage, but has since, nevertheless, made aggressive steps to replace the platform by acquiring trading firm MillenniumIT, the supplier of its new system.

I'd post more info but slashdot has broken copy and paste.

Re:Linux: 1, MS: -1 (4, Insightful)

Anonymous Coward | more than 3 years ago | (#34009362)

It was costing them so much to maintain their systems due to support and modification contracts that they just out and out bought an ENTIRE company whose sole product was...trading systems (For about 50 million'ish pounds IIRC).

In essence they bought a development department lock stock and barrel and it was STILL cheaper than their existing setup.

Re:Linux: 1, MS: -1 (1)

Billly Gates (198444) | more than 3 years ago | (#34009388)

I also wonder what platform as well. Java vs Php and the database software could make it or break it regardless of OS.

Communist Linux (5, Funny)

Anonymous Coward | more than 3 years ago | (#34009238)

Communist Linux - bringing speed and efficiency to the dregs of capitalism.

Re:Communist Linux (1, Funny)

Anonymous Coward | more than 3 years ago | (#34009476)

As long as they don't run any large file transfers in the background, har har.

Gee (4, Insightful)

TubeSteak (669689) | more than 3 years ago | (#34009242)

The record breaking times were measured on the LSE's Turquoise smaller dark pool trading venue, where trades are conducted anonymously.

Dark pools are part of the problem.
Transparency is critical for a functional marketplace.
Dark pools only require trades to be listed after the fact...
Which isn't as useful as it sounds, even if brokerages weren't completing the trades in/across-house, where disclosure is not required.

Anonymity and secrecy are anathema to a functional market

Re:Gee (0)

Anonymous Coward | more than 3 years ago | (#34009640)

Transparency is critical for a functional marketplace.

Anonymity and secrecy are anathema to a functional market

Lovely assertions; care to back them up with at least a vague hint as to why anonymity is so bad? Or what goes wrong in its absence?

PR Rubbish (1)

abigsmurf (919188) | more than 3 years ago | (#34009244)

It may be that a Linux network is able to conduct trades faster than a windows one. I'd be willing to be though that most of this dramatic speed increase is down to new hardware. The windows network the LSE was on was what... 4+ years old?

Re:PR Rubbish (1)

Sean Hederman (870482) | more than 3 years ago | (#34009480)

I think it has little to do with the Linux vs Windows, and more to do with badly designed and implemented software.

Re:PR Rubbish (2, Funny)

Robert Zenz (1680268) | more than 3 years ago | (#34009638)

...and more to do with badly designed and implemented software.

So we are back to Linux vs. Windows, huh? ;)

Hip hip hooray for Wine (1)

SpaghettiPattern (609814) | more than 3 years ago | (#34009246)

Hip hip hooray for Wine!

I'm sure they took the complete system as it used to run on Windows and then simply ran it on Linux using Wine, thus allowing for great comparison.

Or maybe they completely redesigned the system, avoided known bottle necks and halved the response time.

I'm a UNIX developer since many, many moons but I find these stories lacking detail highly disturbing. Sure, nice Linux PR but on /. I'd hope to get a bit more context information.

Re:Hip hip hooray for Wine (1)

antifoidulus (807088) | more than 3 years ago | (#34009406)

Seriously? You seriously think they would use Wine for a real time system? Are you out of your mind? Much more likely what they did is they ported over a lot of their code to run on a heavily modified real-time Linux(whose scheduler is a hell of a lot different than the one used by desktop distros). If you know what you are doing writing portable C isn't all that hard.

Re:Hip hip hooray for Wine (0)

Anonymous Coward | more than 3 years ago | (#34009670)

Wooooosh...

I was just thinking (0, Troll)

rshxd (1875730) | more than 3 years ago | (#34009256)

If it was running Apple hardware and Mac OS, it would cost about 10x more and be 10x slower than the Microsoft solution

trading time (1)

MSG (12810) | more than 3 years ago | (#34009260)

trading speeds of several hundred microseconds

Several hundred? All of the stories I've seen in the past about TradElect indicated that trades were measured in the milliseconds... The new system seems to be about twenty times faster.

Re:trading time (0)

Anonymous Coward | more than 3 years ago | (#34009294)

Avg roundtrip on TradElect was between 1 and 2 ms.

Re:trading time (0)

Anonymous Coward | more than 3 years ago | (#34009438)

Shesh, do the math:

10 hundred microseconds = 1 millisecond

So the TradElect system measured in milliseconds would be say 160 hundred microseconds - that certainly looks like hundreds of microseconds to me

If new system takes say 8 hundred microseconds, the old system at 20 times slower would take 160 hundred seconds, or 16 milliseconds.

The year of Linux desktop... (3, Funny)

mathfeel (937008) | more than 3 years ago | (#34009268)

1. Create a super fast OS that take over the world's stock trading
2. Ruin the economy so that no one can afford to buy proprietary product any more
3. ...
4. Linux on every desktop!!!

The rent is too "DAMN" high! (-1, Offtopic)

Anonymous Coward | more than 3 years ago | (#34009272)

http://www.rentistoodamnhigh.org

Light (1)

pgn674 (995941) | more than 3 years ago | (#34009278)

Distance light travels in 126 microseconds: 23 miles, or 38 kilometers. That's fast.

TFA isn't detailed on what exactly takes 126 microseconds, calling it 'trading time,' 'trading speed,' 'latency,' and maybe how long it takes to process orders. I'm wondering, where are the computers that are doing the trading? Do they need to be positioned within a few miles of the stock exchange servers, with dedicated fiber optic lines between them? Because it sounds like that'd be necessary to make this kind of speed up in the stock exchange servers meaningful.

Re:Light (1)

Anpheus (908711) | more than 3 years ago | (#34009322)

If it's anything like the NYSE is planning, they let the investment banks build their high speed trading server racks right next to the stock exchange racks. Literally.

Supposedly there's even ways to get your server physically in the same rack as one of the NYSE's exchange servers, but I think that might be taking it a bit too far, or maybe an overzealous reporting on the matter. But I don't think it's even disputed anymore that they're letting banks colocate with the exchange.

Re:Light (4, Insightful)

Nursie (632944) | more than 3 years ago | (#34009422)

The world of high finance has become just a bunch of racks frantically swapping bits around.

Yet when it screws up, the shocks are felt everywhere, for some reason.

Something is sick on this planet, when automated behaviour of electronic systems decide who eats, who can buy a new mansion, who gets a miserably low pension, whose house is going to be taken away and who's going to pocket a billion dollars in profit.

I'm more and more coming over to the side of those that say the whole finance sector is parasitic in nature and needs to be destroyed.

Re:Light (1, Informative)

Anonymous Coward | more than 3 years ago | (#34009338)

That is exactly what they are, the land prices around the servers in New Jersey has sky rocketed as trading corporations are buying land as close to the servers as they can possibly do in order to gain an advantage over their competitors. This whole millisecond trading is ludicrous and I am sure it will result in a next big bubble as the price is not based on any real evaluation of the corporation traded.

Re:Light (4, Informative)

dakameleon (1126377) | more than 3 years ago | (#34009366)

Yep, and major trading firms will do anything to get closer to the exchange servers. I worked for a Major Bank which had a major data centre well outside London which hosted all the "slow" apps, and a small (but well cooled) server room in the City a few blocks from the LSE building. Each and every app in the central data room had to justify its need, and every so often you would hear about acquisitions of real estate closer still.

This is of course pre-2008; I'm no longer so intimate with the details of server rooms at major banks. C'est la vie.

trade speed (5, Insightful)

Eivind (15695) | more than 3 years ago | (#34009304)

Trade-speed is irrelevant to investors.

It's relevant to highly speculative robot-trader algorithms that try to make a profit by arbitraging sub-second timing-issues. But this is a zero-sum game: one trader can only gain $X by taking advantage of timing if other traders lose PRECISELY $X, so to the sum of traders, this is irrelevant.

Stock-exchanges, make a living trough fees. The fees are coupled with volume, i.e. a broker that has a larger volume of orders, will pay higher fees.

So lower latency is good for the stock-exchange, neutral for traders on equal grounds and negative for those suckers who play at daytrading. It -does- tilt the table towards those with machinery though, but the effect is irrelevant for traders who aren't extremely short-term.

In short: yet another reason to invest rather than speculate.

If you buy and sell 20 times today, each time with the table tilted a tenth of a promille against you, you'll on the average lose 2 promille, plus the fees. This doesn't sound like much, but a trader that does this 200 days a year, will have lost 20% of his profit to the tilted table. (if his flat-table profits where less than 20%, he'd thus run a minus)

Meanwhile, the investor, who holds stock on the average 5 years, will also lose a tenth of a promille in every transaction, but since he's got 2 transactions in 5 years, that works out to 0.4 transactions/year -- thus his loss relative to the flat table is 0.4 * 0.01% = 0.004% pro year, which is irrelevant.

Re:trade speed (0)

Anonymous Coward | more than 3 years ago | (#34009592)

Meanwhile, the investor, who holds stock on the average 5 years, will also lose a tenth of a promille in every transaction, but since he's got 2 transactions in 5 years, that works out to 0.4 transactions/year -- thus his loss relative to the flat table is 0.4 * 0.01% = 0.004% pro year, which is irrelevant.

Translation:
It's OK to steal from investors if you only steal a little bit from a large number of them.

Re:trade speed (0)

Anonymous Coward | more than 3 years ago | (#34009598)

Just remember kids, don't you dare to make money of these robot-trade algorithms or you'll be convicted [theforeigner.no]

Yeah, but (1)

toygeek (473120) | more than 3 years ago | (#34009340)

Does it run LINUX? Oh wait, it does. Cool!

Re:Yeah, but (1)

1s44c (552956) | more than 3 years ago | (#34009426)

Does it run LINUX? Oh wait, it does. Cool!

If I built a robot that stole cash out of your bank account and it ran Linux would that still be cool?

Some things are not cool no matter what OS they run.

Yes it's a really bad analogy but still.

Re:Yeah, but (2, Funny)

oji-sama (1151023) | more than 3 years ago | (#34009520)

Bender runs Linux? Cool.

Re:Yeah, but (0)

Anonymous Coward | more than 3 years ago | (#34009560)

Meme goes whoosh!

Wait up zealots. (1)

metrix007 (200091) | more than 3 years ago | (#34009354)

This speed is not specific to Linux, it is because it is a new system which has been optimized.

Had they switched to BSD, Solaris, OS X or even a a recent version of Windows and optimized the application, then it would be just as fast.

Sorry kids, thems the breaks.

Why oh why do people have a need to spread reverse FUD and give "linux" props it does not deserve?

Re:Wait up zealots. (1)

RyuuzakiTetsuya (195424) | more than 3 years ago | (#34009392)

No, but they hopped ship from Windows anyway.

I'm guessing there's serious TCO and maintainability issues being addressed.

I had a funny conversation with a guy in another department, he's bitching about 32bit vs 64bit ODBC for some long overdue infrastructure changes, I looked at him and said, "I did sudo yum install mysql" and just ported my packages over.

He was a little pissed...

Re:Wait up zealots. (1)

Sean Hederman (870482) | more than 3 years ago | (#34009524)

It had nothing to do with TCO, maintainability or anything like that. It has to do with the fact that the software they're switching to is the fastest in the world. The fact that it runs on Linux is actually a disadvantage, since most of their skills are MS-based. But they don't care because the software is so fast and customisable.

Re:Wait up zealots. (1)

LingNoi (1066278) | more than 3 years ago | (#34009616)

Actually you're completely wrong. They bought an entire company who specialises in exchange systems on linux, so none of their skills are in Microsoft based systems. Buying that company was cheaper then their previous MS based system which suffered a complete loss of days trading and was much slower.

There's really no disadvantage here. They've saved money, got a more stable system and have someone to complain at when things go bad unlike their previous MS based solution where the company in charge of it absolved themselves from responsibility simply blaming Microsoft.

Re:Wait up zealots. (1)

Sean Hederman (870482) | more than 3 years ago | (#34009658)

The LSE's existing staff are MS-based. My point was that since the software they were looking at was Linux-based, that was actually a point against it when they were evaluating. They went with it anyway because the speed advantages were too good to resist, and it was proven technology. I promise you that the LSE care nothing for MS vs Linux. If there had been an MS-based system with the same performance and reliability, they would have been happy going with that. There wasn't, so they didn't.

As for "the company in charge of it", the current system is owned and developed by the LSE. It was handed over to them by Accenture some years ago. Since they now own the new system as well, I'm not sure exactly who you think they'll "complain at when things go bad" that they don't have now.

So, in summary, the reason they bought this software was that it would have been too expensive and risky to get their existing systems to the performance characteristics required, which is no surprise to anyone who has ever had to deal with Accenture-developed code.

Re:Wait up zealots. (2, Informative)

_Sprocket_ (42527) | more than 3 years ago | (#34009532)

Why oh why do people have a need to spread reverse FUD and give "linux" props it does not deserve?

Because Microsoft highlighted the TradeElect system in their "Get the Facts" campaign. Oddly enough, if you read the press kit Microsoft put together, you'd get the impression that a recent version of Windows and an optimised application was in place and doing very well. Maybe Linux does get some small slice of kudos after all.

http://web.archive.org/web/20070706203521/http://www.microsoft.com/windowsserver/facts/casestudies/lse.mspx [archive.org]

blame the penguins ! (0)

Anonymous Coward | more than 3 years ago | (#34009370)

great, during the next financial hickup banks and traders will be able to put the blame on linux rather than mathematicians.

Microsoft, get these facts! (5, Insightful)

Idaho (12907) | more than 3 years ago | (#34009372)

Remember that this very stock exchange moving to a purely Microsoft/.NET based solution was widely touted in Microsoft's so-called 'Get the "Facts"' campaign. Microsoft was involved (with Accenture) in the implementation of the project, not just in selling some Windows licenses. So this screwup should really be a PR disaster for them. If Microsoft themselves cannot even get a .NET project to work in places where their Linux-using competitors have no trouble at all (Chi-X is also Linux-based), then that sure looks like a platform in trouble to me.

Remember that the entire thing crashed down for an entire trading day, something that you can imagine didn't go over well, and together with the high latencies and other numerous problems, was the reason they dumped it for Linux.

Where is Accenture now? (0)

Anonymous Coward | more than 3 years ago | (#34009502)

Where is Accenture now? Incompetence and malice do not go away, they simply moves around looking for more victims. The trend has been for corporate welfare to take place within large universities. Might be time to look around so thesituation can be made better by countering their rot.

How scientific is this? (2, Insightful)

bertok (226922) | more than 3 years ago | (#34009382)

I'm willing to bet that this has little to do with Linux.

It's a great server OS, sure, but lets look at this realistically:

- the Windows / .NET trading system was based on Windows 2003 and SQL 2000, and was deployed in 2005.
- the Linux-based system is under development now, to be deployed next year.

Just based on that, you'd expect substantial performance differences from just using newer hardware. Chances are that the original kit was certified as a part of the solution, and hasn't been replaced since. With all-new gear, I'd expect about 2-3x the CPU performance, and if they're using 10GbE (likely), then 10x the network performance.

Even ignoring the hardware and the OS, one would expect 90% of the performance to be determined by the application, not the OS. Decisions like writing the software in .NET versus C or Java, or using a special-purpose Java runtime would make a huge difference, irrespective of the OS.

On top of this, the software stack is completely different, and developed by a different team. Just about every design decision, small and large, will be different.

To make a fair comparison, you'd have to run the new software on both OS platforms, on the same hardware.

Fast crash (1)

Zoxed (676559) | more than 3 years ago | (#34009384)

Great news: now the economy can crash even faster !!

News flash: new dedicated platform faster than old (0)

Anonymous Coward | more than 3 years ago | (#34009410)

The new platform is Java. Linux is not magical "go faster juice" here, and the new software and the hardware configuration has virtually everything to do with it.

Slashdot has not changed one iota in ten god damned years.

Re:News flash: new dedicated platform faster than (0)

Anonymous Coward | more than 3 years ago | (#34009544)

Yeah, except for the fact that MS themselves was using the old LSE system running on .net for their "get the facts" FUD campaign. Seems to me that turnabout is fair play.

Or maybe you trolls just haven't changed in ten god damned years!

It was a MS Win2003 system (-1, Redundant)

flyingfsck (986395) | more than 3 years ago | (#34009414)

Some comic relief:

1. Euphoria:
http://web.archive.org/web/20080303191622/www.microsoft.com/casestudies/casestudy.aspx?casestudyid=51828

2. Reality:
http://blogs.computerworld.com/london_stock_exchange_suffers_net_crash

3. Tux to the rescue:
http://www.computerworlduk.com/news/networking/3244936/london-stock-exchange-smashes-world-record-trade-speed-with-linux%22%22

4. The dead cat bounce?
http://moneycentral.msn.com/investor/charts/chartdl.aspx?symbol=MSFT&CP=0&PT=11

Why? (0)

Anonymous Coward | more than 3 years ago | (#34009450)

I'm about as pro-capitalism as can be, but I really think shit like this does a dis-service to society. When you have to make trades in 128 microseconds, you can't tell me you're doing anything but fucking the system to get rich.

Real capitalism works better than any other economic system, but this "let's fuck everybody to get rich and call it capitalism" bullshit is the kind of thing that pisses everybody off and pushes us towards communism, socialism and totalitarianism.

Re:Why? (1)

jappleng (1805148) | more than 3 years ago | (#34009582)

corporations don't need to have public options in their stocks. most of the traditional corporations out-there do this but a lot of the newer corporations have privatized it so there's less risks and they can do whatever they feel like doing without worrying about shareholders. Personally I hate the stock exchange system.

NASDAQ under 100 (1)

harlows_monkeys (106428) | more than 3 years ago | (#34009458)

NASDAQ is under 100 usec.

YUP!! EVERYONE but LINUX REAPS THE $$$$ (0)

Anonymous Coward | more than 3 years ago | (#34009466)

Gotta hand it to the workers of the commune. (Clap4daWolfman !!) The joy of the harvest goes to the many while the joy of the reap goes only to the few.

speed is counterproductive (2, Informative)

Tom (822) | more than 3 years ago | (#34009538)

One shouldn't forget that these high speed tradings are not in the interest of investors, companies being traded or other market participants with a real-world interest. They serve only the high-speed/high-volume speculative traders, specifically algorithmic or automated traders.

Even Wall Street is slowly waking up to the problem:
http://online.barrons.com/article/SB50001424052970203952604575552190237324972.html?mod=BOL_twm_mw [barrons.com]

This was a bomb about a week ago when it was published, the guy making those statements is a Wall Street billionaire, not a hippie communist.

So what are they using? (0)

Anonymous Coward | more than 3 years ago | (#34009584)

Linux it self cannot replace .NET, unless you use Java or some other platform/language to deliver a package of similar functionality to what they originally had. So what is the new trading package written in? C++?

Faster than "ping localhost" (1, Interesting)

zarlino (985890) | more than 3 years ago | (#34009608)

ping localhost
PING localhost.localdomain (127.0.0.1) 56(84) bytes of data.
64 bytes from localhost.localdomain (127.0.0.1): icmp_req=1 ttl=64 time=0.053 ms

Get the lies. (0)

Anonymous Coward | more than 3 years ago | (#34009612)

From "Get the lies": http://web.archive.org/web/20070706203521/http://www.microsoft.com/windowsserver/facts/casestudies/lse.mspx

"As part of its strategy to win more trading business and new customers, the London Stock Exchange needed a scalable, reliable, high-performance stock exchange ticker plant to replace its earlier system. Roughly 40 per cent of the Exchange’s revenues are generated by the sale of real-time information about stock prices. Using the Microsoft® .NET Framework in Windows Server® 2003 and the Microsoft SQL Server 2000 database, the new Infolect® system has been built to achieve unprecedented levels of performance, availability, and business agility. Launched in September 2005, it is maintaining the London Stock Exchange’s world-leading service reliability record while reducing latency by a factor of 15. Its successful implementation, with support from Microsoft and Accenture, shows the London Stock Exchange’s leadership in developing next-generation trading systems."

And Accenture is responsable for this mess too.

Offtopic - for gods sake why?!@ (1)

AbRASiON (589899) | more than 3 years ago | (#34009654)

Can someone please tell me how to get back to the old comment system? I'm checking slashdot, daily as usual - looking forward to reading insightful comments and lo and behold each day I forget this abomination is here, it's awful.

I've tried emailing the feedback address, it bounced surprisingly, I'm about to give up on the site. What's the solution here guys.
Sorry to be offtopic but I can't be the only one.

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