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London Stock Exchange Finishes Switch To Linux

Soulskill posted more than 3 years ago | from the takes-a-while-to-put-on-a-good-tux dept.

Novell 106

DMandPenfold writes "The London Stock Exchange has successfully set into live trading a new matching engine based on Novell SUSE Linux technology, following successful last-step setup procedures on Saturday. The move has been billed as one of the LSE's most significant technological developments since the increasing prevalence of electronic trading led to the closure of the traditional exchange floor in 1986. LSE chief executive Xavier Rolet has insisted that the exchange, once a monopoly, will deliver record speed and stable trading in order to fight back against the fast erosion of its dominant marketshare by specialist electronic rivals."

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106 comments

Should it be...? (2)

c0lo (1497653) | more than 3 years ago | (#35207218)

based on Novell SUSE Linux technology

Should it be Attachmate (err... Microsoft [computerworld.com] ...?) Linux Technology already?

Re:Should it be...? (2)

nicholas22 (1945330) | more than 3 years ago | (#35211476)

First of all, the link you provided leads to an opinion article. 'Nuff said.

Even if Microsoft bought some rights from Novell via the Attachmate deal, the current stack is *not* Microsoft tech. The Accenture/MS solution (TradElec) was binned as it was problematic, it crashed for a whole day [practical-tech.com] and it never reached its performance targets (using Server 2003 and SQL 2000 [computerworld.com] ). The CEO who had brought it in was apparently fired [computerworld.com] .

London Linux (5, Funny)

RooftopActivity (1991792) | more than 3 years ago | (#35207222)

Does this mean the prompt will be a GBP (£) sign instead of a dollar ($) ?

Re:London Linux (5, Funny)

ggeens (53767) | more than 3 years ago | (#35207368)

Does this mean the prompt will be a GBP (£) sign instead of a dollar ($) ?

No, but the root prompt will be £ instead of #.

Re:London Linux (2)

mehemiah (971799) | more than 3 years ago | (#35209836)

I WANT that prompt ... I'm doing it.

Re:London Linux (0)

Anonymous Coward | more than 3 years ago | (#35210124)

Good for you, sportsfan.

Re:London Linux (2)

Linker3000 (626634) | more than 3 years ago | (#35210692)

Money is the root.....

Re:London Linux (0)

Anonymous Coward | more than 3 years ago | (#35208060)

Mod parent UP!

Re:London Linux (2)

nOw2 (1531357) | more than 3 years ago | (#35208400)

Ha, talk about mental gears clicking into place. I'd grown so use to seeing the dollar sign as a prompt I'd completely separated it from the currency in my mind, as if there were two different symbols.

the problem is algorithmic trading... (3, Interesting)

SuperBanana (662181) | more than 3 years ago | (#35207270)

the exchange, once a monopoly, will deliver record speed and stable trading in order to fight back against the fast erosion of its dominant marketshare by specialist electronic rivals

The issue facing markets isn't that. It's algorithmic trading:

https://secure.wikimedia.org/wikipedia/en/wiki/Algorithmic_trading#Issues_and_developments

https://secure.wikimedia.org/wikipedia/en/wiki/2010_Flash_Crash

Re:the problem is algorithmic trading... (4, Insightful)

beelsebob (529313) | more than 3 years ago | (#35207292)

What makes you think there needs to be exactly 1 problem?

one problem (2, Insightful)

louic (1841824) | more than 3 years ago | (#35207712)

There is exactly one problem: greedy people

Re:one problem (5, Insightful)

InterGuru (50986) | more than 3 years ago | (#35208506)

Blaming an economic collapses on greed is like blaming a bridge collapse on gravity. Both are always there, you design your system around them.

Re:one problem (3, Insightful)

tehcyder (746570) | more than 3 years ago | (#35210420)

Blaming an economic collapses on greed is like blaming a bridge collapse on gravity. Both are always there, you design your system around them.

Yes, and part of your system is not to encourage the greediest fuckers so much, and certainly not to let them escape oversight until it all goes tits up.

Re:one problem (1)

dna_(c)(tm)(r) (618003) | more than 3 years ago | (#35211492)

So, you essentially confirm what he said, you just offer advise how to deal with it. Greedy people are the problem.

To go into your analogy: the purpose of the bridge is to allow the economy to grow and be more efficient, not to provide some very smart people with an implement that stores a huge amount of potential energy due to its intended position in the gravitational field of planet Earth. Protect the bridge.

The market is there to provide companies with capital, so that the economy can grow. Protect it.

Re:the problem is algorithmic trading... (5, Funny)

jo_ham (604554) | more than 3 years ago | (#35207842)

The is only one problem: entropy, leading to the eventual heat death of the universe.

Re:the problem is algorithmic trading... (0)

Anonymous Coward | more than 3 years ago | (#35208314)

The is only one problem: entropy, leading to the eventual heat death of the universe.

What makes you think that's a problem?

Re:the problem is algorithmic trading... (1)

tehcyder (746570) | more than 3 years ago | (#35210402)

The is only one problem: entropy, leading to the eventual heat death of the universe.

Yes, that sort of puts everything in perspective. If you're immortal.

Re:the problem is algorithmic trading... (2)

jo_ham (604554) | more than 3 years ago | (#35211396)

Dick Clark has been complaining about it since the original new year's eve.

Re:the problem is algorithmic trading... (0)

Anonymous Coward | more than 3 years ago | (#35212084)

Thermodynamics gets tossed on its head when you realize that quantum scale fluctuations introduce energy gradients everywhere, all the time, no matter what.

Re:the problem is algorithmic trading... (1)

Mithur (945610) | more than 3 years ago | (#35207416)

Even so... Really someone thinks that changing to linux in LSE will make a fairest world.. c'mon! Now we can say that linux also helps to starve the world and concentrate wealth with the commodities bubble...

Re:the problem is algorithmic trading... (0)

Anonymous Coward | more than 3 years ago | (#35207428)

Now we can say that linux also helps to starve the world and concentrate wealth with the commodities bubble...

Ahhh, the sword that keeps on giving...

Re:the problem is algorithmic trading... (0)

Anonymous Coward | more than 3 years ago | (#35207826)

Yes, but if you want a fast trading algorithm to work, the stock exchange needs to upgrade. Which is what they've done. So the exchange itself is part of the problem now.

Re:the problem is algorithmic trading... (0)

Anonymous Coward | more than 3 years ago | (#35208112)

Latch on to that belief dear friend. That makes the problem seem easy to solve doesn't it.

The problem is systemic and about rewarding greed.

--
Enrico M.

Re:the problem is algorithmic trading... (2)

dintech (998802) | more than 3 years ago | (#35208444)

The issue facing markets isn't that. It's algorithmic trading

You couldn't be more wrong. The absolutely opposite is true. Algorithmic trading is exactly what the exchanges want and here's why:

Increased trading means increased fees. Exchanges charge a fee for each and every order. MTFs such as Chi-X and Turquoise grabbed market share by having a clever pricing structure based on whether your order is sitting on the order book and filled (passive) or your order is immediately filled against something already at the top of the order book (aggresive). The MTFs actually reimbursed fees if you are passive and charged you less that the LSE in any case for being aggressive. This attracted huge amounts of liquidity from the primaries and encouraged market making behaviour. Throw in that they often had better technology since it was all brand new. This was all circa 2007.

For some reason, whenever a subject about trading comes up on Slashdot, some of you love to find a way to fit in some algo bashing. Likely the same people that mindlessly bash Obama irrespective of the topic. Wouldn't you be happier over at 911truth?

Impending Merger (3, Informative)

Anonymous Coward | more than 3 years ago | (#35207324)

This likely means that the Toronto Stock exchange will soon be using Linux as well [www.cbc.ca] , if they aren't already.

Re:Impending Merger (0)

Anonymous Coward | more than 3 years ago | (#35208642)

The merger won't get regulatory approval from the Canadian side as it would put policing in the hands of foreigners.

Re:Impending Merger (3, Informative)

dolmen.fr (583400) | more than 3 years ago | (#35214944)

The trading engine of the Paris stock exchange (previously Euronext, now NYSE-Euronext) is already on Red Hat Linux since 2006 [atoseuronext.com] .

YES!!!! :) (2)

youn (1516637) | more than 3 years ago | (#35207352)

I know it's not my most sophisticated comment, but I like open source so I am happy :)

Re:YES!!!! :) (1)

Anonymous Coward | more than 3 years ago | (#35207386)

Who said it will be open source? It can be based on Linux, and use proprietary software.

Re:YES!!!! :) (1)

Anonymous Coward | more than 3 years ago | (#35207482)

I can promise you what's installed there is far from open source.

Re:YES!!!! :) (1)

DrXym (126579) | more than 3 years ago | (#35207710)

I know it's not my most sophisticated comment, but I like open source so I am happy :)

The OS sitting at the bottom of the software stack is open source. The rest isn't. I imagine Linux is attractive because it supports a wider array of hardware than Windows would especially for a system which must guarantee low latency, high throughput.

Re:YES!!!! :) (1)

jimicus (737525) | more than 3 years ago | (#35207748)

Doubt it. It's not like you're going to cobble together the systems running a stock exchange from whatever you could find leftover in the warehouse.

Infinitely more likely that there's only a handful of software development houses with the expertise to develop stock exchange systems of this sort of size. (Which makes sense, as there's only a handful of big stock exchanges). Which means there's only a handful of companies that are going to be taken seriously if they bid for the contract.

Assuming there's only, say, three such development companies, only one of them provides a product that runs under Windows and that one's being turfed out anyhow, it's more-or-less inevitable the replacement wouldn't run under Windows.

Re:YES!!!! :) (4, Insightful)

DrXym (126579) | more than 3 years ago | (#35208110)

I didn't say cobble together. What I meant is Linux runs on big iron, it runs on PC architectures, it runs on racks. Multiple architectures, multiple roles, same OS. It makes it easier to put the system together when everything is running the same OS. I imagine that a system like a stock exchange would have embedded systems with honking amounts of memory for low latency streaming / quotes and large mainframe backends for recording trades. All tied together with the fastest network / backbone you could lay your hands on.

My understanding is the previous system was .NET over windows which raises large question marks over performance (e.g. unexpected garbage collections) and the sort of hardware that it could be run on.

Re:YES!!!! :) (1)

shutdown -p now (807394) | more than 3 years ago | (#35214932)

My understanding is the previous system was .NET over windows which raises large question marks over performance (e.g. unexpected garbage collections)

It seems that the new system is running on Java, though, which is hardly an improvement in hard real-time department.

Re:YES!!!! :) (1)

DrXym (126579) | more than 3 years ago | (#35220348)

It seems that the new system is running on Java, though, which is hardly an improvement in hard real-time department.

Well there are JVMs implemented in hardware and JVMs with real time RTSJ support (e.g. Websphere Realtime [ibm.com] . I suppose it's also possible that some parts of the system are Java and some aren't and I wouldn't really know what the LSE does without looking.

I know when I worked for a financial house that it was a mix of code. C++ / .NET represented the thick client code. Java represented the web UI and middleware, in the back you might have mainframe views all tied together with b2b XML or webservices. So when you filled a trade ticket you might do it through C++ or Java, which would be sent as XML to middleware which would dump it in a mainframe view. Later on you might get a acknowledgement of the trade through a stream which would also supply streaming quote data and other realtime info.

Much of the infrastructure that did realtime quotes and research functionality for the consumer facing services was actually perl scripts running against a module in a web server. Sounds weird but the module kicked off a bunch of slave threads and a pile of shared memory and basically listened to a streaming service. The perl script was precompiled so it could be invoked rapidly and instantly spew out XML containing the latest quote data.

Yes it was messy but indicative of an organic growing system.

In summary trading systems are not easy. But moving to an open source OS at least opens up the choices you have for hardware and whatnot. What you run over the top is obviously going to have it's own performance impacts so the OS alone is not the only factor.

Re:YES!!!! :) (0)

Anonymous Coward | more than 3 years ago | (#35208242)

... only a handful of software development houses with the expertise to develop stock exchange systems of this sort of size.

Nonsense. Writing a matching engine is trivial. Writting a very highly scalable matching engine is, agreeably, slightly more difficult, but nothing that a small team of half-way experienced developers, and a couple of good network engineers, shouldn't be able to get to a beta level product within about 6 months.

Re:YES!!!! :) (1)

Americano (920576) | more than 3 years ago | (#35208718)

Yeah, and then another 3 years hiring somebody new and letting them rewrite it because your homebrew hobbyists who you thought would save you money low-balled the project because "LOL HOW HRD CUD IT B RLY?"

Nothing happens in the financial services industry in "about 6 months." Your project estimate reads like a PHB asserting, "I don't understand this, so I'll assume it's trivial, and can be done by half a dozen guys in half a dozen months."

Re:YES!!!! :) (1)

Orne (144925) | more than 3 years ago | (#35212038)

Larry Ellison of Oracle once told Netscape's board that his cat could write a web browser. Microsoft popped out Internet Explorer later that year.

Re:YES!!!! :) (1)

Americano (920576) | more than 3 years ago | (#35213114)

I'd make three comments in response:
1) MSIE 1 was started, by the accounts I can find, in mid-to-late 1994, and released in August 1995. So a year+ of development.
2) MSIE 1 was significantly simpler than a high-volume, high-availability critical trade processing system which handles hundreds of thousands of trades each day;
3) IE largely succeeded over time on the back of Microsoft's anticompetitive practices, and THEN would have laid in a corner neglected if Firefox hadn't come along to shock them out of their complacency and force them to begin supporting newer web standards.

IE is not a good example for showing that you can write highly complex, high scalable, fault tolerant/highly available trading systems with "half a dozen coders and 6 months." In fact, its development history shows that it will generally require a significantly longer timeframe to accomplish anything of note.

Re:YES!!!! :) (1)

orlanz (882574) | more than 3 years ago | (#35209020)

Actually, these types of things are usually in house. If there ever was a case for non-off-the-shelf software, a SE booking & matching engine is it. Most of the developers will be inhouse. The reason to use Linux is most likely that you can strip out all non-essentials. A path that an order takes from external interface to execution can be seriously streamlined with little intereferance from the OS. Imagine having fat kernels like Windows in the interfaces/perimeters and slim kernels almost akin to embedded systems within the centralized engine(s) itself. Inside and outside the system you don't care about security, but on the perimeter, you setup some big bouncers. There are only two platforms that provide this capability & flexibility at a competitive scale while retaining a common programming interface. BSD and Linux. Linux has a better user side support and there are more programmers for it in the overall ecosystem. BSD may have better security, but once inside the system... who cares.

There is also the aspect of scalability; bringing on and tearing down virtual/physical machines as needed. A thin Linux/BSD/embedded solution flows more linearly and smoothly with demand than say full blown Windows/Redhat ES. With a standardized OS/programming interface, you can break down processes to individual tasks quite efficiently. This allows you to identify bottlenecks in the process and reenforce them with additional parallel processes/machines when needed to maximize throughput. Monolithic systems just don't do this well without huge upfront resource investments and increasing power on non-bottlenecks causing waste.

ACN FTW (3, Interesting)

Anonymous Coward | more than 3 years ago | (#35207358)

And so ends one more of an increasingly long line of Accenture / MSFT snafus.

Re:ACN FTW (2)

mangu (126918) | more than 3 years ago | (#35208646)

And so ends one more of an increasingly long line of Accenture / MSFT snafus.

At $40 million / snafu they couldn't care less. Now let's see the people at LSE who proposed the Accenture / MSFT solution. Will they be fired? Will the $40 million be discounted from their bonuses? I doubt it. Because they are probably working at another victim by now. Where will the next snafu be? Stay tuned.

Re:ACN FTW (3, Informative)

nicholas22 (1945330) | more than 3 years ago | (#35211376)

The CEO who brought in the TradElec joint Accenture / Microsoft solution has been fired. As for the TradElec platform itself, it was binned. The main rival of TradElec was selected. I'd call this a major SNAFU [zdnet.com] . Where are the self-indulgent comments from MCSEs that 'choosing Microsoft never got anyone fired' now?

Re:ACN FTW (1)

Phantom Gremlin (161961) | more than 3 years ago | (#35216968)

Back in the old days when Pud ran FuckedCompany.com, he would love to post stories about Accenture. He'd always say: Accenture (pronounced ass-enter).

Novell? (0)

Anonymous Coward | more than 3 years ago | (#35207378)

Is Novell SUSE Linux good?

Re:Novell? (-1)

Anonymous Coward | more than 3 years ago | (#35207422)

It's Linux, that means it's crap.

Re:Novell? (1)

AlienIntelligence (1184493) | more than 3 years ago | (#35207456)

Is Novell SUSE Linux good?

I liked old SUSE, it was one of the first distro flavors
that I preferred over the stodgy (at that time) other
players. Haven't tried newest.

My old job uses OpenSUSE which I was pretty much
impressed with. (not the distro, the fact that my company
used it). What was presented was a locked down environ
that I didn't get to see too much of, til things went bad.
At prompt... everything was pretty much like you'd expect.

So, did you just want to know if the *dm is pretty? =)
cause the kernel and command set are relatively similar
to everything else out there.

-AI

Re:Novell? (1)

petermgreen (876956) | more than 3 years ago | (#35209130)

IMO the big things with a linux distro are

1: what is their release frequency and security update policy like? fast releases with little overlap mean a lot of time spent upgrading systems. Slow releases mean you run into problems with application software depending on stuff that is newer than your distro supplies.
2: what is their QA like? too long and some people complain it's old before it's even released. Too short and you get a buggy release that breaks in a lot of configurations.
3: what is their package management like (both the software but also the archives it backs on to)? how easy is it to install stuff, remove stuff, upgrade to the next release etc. Do you often have to resort to unofficial package archives or building from source (see also point 1)
4: do they set up sane defaults when you install stuff or do they expect you to work everything out from scratch
5: do they provide tools to help you with configuration and if so do they stomp over existing manual configuration or try and work with it as nicely as possible?

Re:Novell? (2)

miffo.swe (547642) | more than 3 years ago | (#35207460)

Novell SUSE Linux is pretty good as long as you think before you do stuff. Its easier to get into dependency hell than with RedHat or Debian/Ubuntu but other than that its very stable and nice. Personally i prefer Debian but i do manage a couple of SUSE machines taking serious loads day and night on a slew of different serivces and they have been working flawlessly without any problems at all.

The switchover came to a grinding halt when... (-1)

Anonymous Coward | more than 3 years ago | (#35207432)

...it was discovered there were no drivers for the installed items!!! Admins had to resort to reinstalling Windows 95.

Re:The switchover came to a grinding halt when... (1)

ebuck (585470) | more than 3 years ago | (#35207454)

The only drivers that were missing were the ones that corresponded to my portfolio.

Even Higher Speed! (1, Troll)

Nursie (632944) | more than 3 years ago | (#35207486)

Because clearly, ever more HFT is exactly what everyone needs!

Re:Even Higher Speed! (3, Informative)

JanneM (7445) | more than 3 years ago | (#35207626)

Because clearly, ever more HFT is exactly what everyone needs!

If you are an automated trader then you do need any speed you can get. If you aren't - well, you probably don't have any business being on the stock exchange any more. A bit more or less speed is not going to make any difference; you're hopelessly outgunned either way.

Re:Even Higher Speed! (2, Interesting)

Anonymous Coward | more than 3 years ago | (#35207706)

Maybe I'm not cynical enough, but all the low-latency trading and algorithmic competition in the world isn't really going to change the fact that I can sit here with delayed stock quotes, look at a company's financial statements, look at the company's P/E ratio and potential for growth and put a bid in at a price of my choosing.

Re:Even Higher Speed! (4, Interesting)

Nursie (632944) | more than 3 years ago | (#35207756)

It sucks money out of the stock market.

Fans of it will say it provides 'increased liquidity'.

Me, I say, it sucks monkey out of the stock market. If it didn't the HFT people wouldn't bother doing it. The money comes from somewhere, and that somewhere is other investors. If it *doesn't* come from somewhere then creating it means there's more money and it comes from everyone via inflation.

That's my take. May be wrong, may be dense, but that's my take. Me, I'd scale back the whole thing massively because I still haven't had anyone explain adequately to me how, after they've gone public, the company's stock market valuation matters (to the company) for anything at all, except for perhaps their ability to rack up debt.

Re:Even Higher Speed! (3, Informative)

micheas (231635) | more than 3 years ago | (#35207980)

"increased liquidity" has a cost.

If you want to buy now, or sell now, instead of spending a few days shopping for a willing partner on the other side of the trade you won't get as good of a price. But you also have the reduced risk of not spending a few days trying to unload your stock.

The one thing that you will notice is that with the high frequency traders the spread is now very small, but the volitility is much higher, so in some ways this is a reaction to discount brokerages and the decimalization of stock prices, as the fees are not in the spread but in the volatility. I don't know which is more profitable to the house, but the reduced spread and the greatly reduced commissions had to be made up for someway. Banks are more profitable now, but there are many fewer banks, so direct comparisons with thirty years ago are not possible without correcting for industry consolidation.

An example of the cost of liquidity is that, while exchanges are liquid, someone selling five to ten percent of a company in the open market in a few minutes can easily erase more than half of the companies market capitalization. But the stock is sold and the books are closed.

One difference between specialists and high frequency traders is that specialists have to be the buyer and seller of last resort, while HFT's have no obligation to make a losing trade.

I have not looked at the math behind technical trading recently, but in the nineties there were several papers published that suggested that technical trends could only see about 15 minutes into the future, and the predictive value more than five minutes into the future was murky, but not useless.

As far as your question of how a companies market capitalization matters to the company, it depends on the company. Some companies carry a large number of authorized shares on the balance sheet, but do have not issued them. The company can give bonuses as stock options which if the options are deep in the money, the investors are essentially paying a substantial percentage of employee compensation, instead of the company paying it. A high market capitalization does not guarantee that people will loan you money, but it does tend to lower your interest rate, and allow you to issue really long term debt. (Disney and Coke issued 100 year bonds, Canadian Pacific issued 1000 year bonds.) One other thing that companies can do with an over inflated market cap is buy things with the stock, see aol buying time warner as a famous example of that. I am sure that there are uses that I am forgetting at the moment. But I hope that is somewhat illuminating.

specialists have to be ....last resort (1)

fregare (923563) | more than 3 years ago | (#35208622)

"specialists have to be the buyer and seller of last resort" . This is total BS. When the shite hits the fan e.g. crash of '87, a specialist does not buy anything that is not for his own self-interest. Would you go bankrupt to preserve the market? The answer is NO ! What are they going to do to you if you don't buy a stock whiose bid is going down to hell and there seems to be no bottom? You don't BUY ! Who cares about the common investor, all you care about is your mistress and your Mercedes. Worst come to worst is that you lose your seat on the exchange or whatever. You surely won't go to jail for NOT buying. It amazes me that people believe all these stupid stories about specialists. I think specialists usually get indicted every couple of years just like goldman sucks does (and whom always pays some sort of fine but no one ever gets indicted). QED

Re:specialists have to be ....last resort (1)

Americano (920576) | more than 3 years ago | (#35208772)

If you're a market maker - who may have a legal & contractual obligation to keep offering trades - yes, you do stay in the market until the trading curbs halt a complete meltdown if things are headed south.

Re:Even Higher Speed! (2)

mangu (126918) | more than 3 years ago | (#35208362)

I still haven't had anyone explain adequately to me how, after they've gone public, the company's stock market valuation matters (to the company) for anything at all, except for perhaps their ability to rack up debt.

If the company's stock is highly valued they can finance growth by selling shares. Otherwise they would have to "rack up debt" in order to grow.

Re:Even Higher Speed! (1)

m50d (797211) | more than 3 years ago | (#35210934)

Me, I say, it sucks monkey out of the stock market. If it didn't the HFT people wouldn't bother doing it. The money comes from somewhere, and that somewhere is other investors. If it *doesn't* come from somewhere then creating it means there's more money and it comes from everyone via inflation.

The whole point of the stock market is it's not a zero-sum game - the companies you invest in are creating wealth (by building a better mousetrap, from materials and labour that are worth less than the finished product), which goes to their owners, i.e. the stockholders.

Now, you're right in that the money that HFT guys make comes in the immediate from other investors. So flip it around: if all they're doing is creaming off profit, why would anyone ever buy from them or sell to them. Answer: they give you the best prices, the narrowest spreads. That's the service they offer, and that makes things better for everyone else in the market - that's what we mean by providing liquidity.

Me, I'd scale back the whole thing massively because I still haven't had anyone explain adequately to me how, after they've gone public, the company's stock market valuation matters (to the company) for anything at all

The stock price isn't (primarily) for company whose stock it is. The stock price is for the benefit of investors who want to buy/sell it. Having a liquid stock market, with stock prices that go up, encourages those with money to invest it in enterprises which create wealth and benefit society, rather than sitting on it. This is all basic stuff.

Re:Even Higher Speed! (0)

Anonymous Coward | more than 3 years ago | (#35216090)

Stock trading is a zero sum game. You're confusing the issues of wealth creation with market mechanics.

For every buyer there is a seller, for every winner, there must be a loser. So if HFT systems are siphoning money out of the market that money is coming from somewhere, most likely the amateur, individual investors as sharks tend not to eat other sharks.

The issue becomes when the sharks eat or scare the guppies out of the water they will in turn end up having to feed on each other as the easy money will be gone.

It astounds me the level of ignorance you nerds have about something as simple as the stock market, but I guess aspies are only good for ensuring the email systems are up and routing and that the desktop pcs have clean keyboards.

Ta.

Re:Even Higher Speed! (1)

m50d (797211) | more than 3 years ago | (#35225898)

Stock trading is a zero sum game.

No it isn't; the total value in the system changes over time - the dow jones or whatever tends, in the long term, to rise.

For every buyer there is a seller, for every winner, there must be a loser.

No; mutually profitable trades can be made when something is worth more to the buyer than it is to the seller. That's the fundamental basis of capitalism.

Re:Even Higher Speed! (1)

JanneM (7445) | more than 3 years ago | (#35208192)

You can. And as long as you treat the stock market as a longer-term investment - a place to park your money - the HFT activity isn't going to matter to you. Buy a portfolio or shares in a couple of index funds, then revisit your holdings oh, once a year or so. No problem. In a ten or twenty year time-frame you'll have done much better than the mattress or a bank account, and likely be ahead of bondholders.

But trying to play the stock market - to trade your way to wealth - is a losers game today if you're an individual investor without the resources and technical know-how to keep up with other automated traders.

Re:Even Higher Speed! (1)

jimicus (737525) | more than 3 years ago | (#35208368)

If it's in an index-linked fund there's a good chance you'll wind up beating automated traders. 80% of the things that try to beat the market average fail, sometimes spectacularly.

Re:Even Higher Speed! (1)

Nursie (632944) | more than 3 years ago | (#35208492)

LOL. over the last decade or so, funds have (in general) been a great way to make next to no money at all. The dot-com burst and then the "crisis" we're apparently still recovering from.

Re:Even Higher Speed! (1)

Americano (920576) | more than 3 years ago | (#35208812)

Looks like somebody doesn't know about dollar cost averaging and long term investment in a diversified portfolio.

Re:Even Higher Speed! (1)

Nursie (632944) | more than 3 years ago | (#35210096)

Actually, no, but then the dollar is meaningless to me as I don't live in the US.

And you can diversify as much as you like, roughly every ten years (it seems) everything takes a major dive for a year or two.

Re:Even Higher Speed! (1)

Americano (920576) | more than 3 years ago | (#35210414)

Pound cost averaging? Unit cost averaging? Cost average effect? Any of those ring a bell? They all (along with Dollar cost averaging) describe the same thing.

And "things taking a dive" is exactly *why* you diversify - across sectors, across regions, and across instruments, and across company sizes. In laymen's terms, this avoids "putting all your eggs in one basket." Some sectors of the economy hold up better in downturns than others; Some instruments hold up better than others; some regions hold up better or recover faster; some types of companies are better poised to take advantage of downturns and the inevitable recoveries that follow them. Spreading your money out helps dampen the impact of big dives on your portfolio.

Investing "wisely" doesn't take lots of specialized knowledge or time. Given that this money is supposed to support you for 20+ years in your retirement, spending a few weeks in your 20's and 30's understanding how to diversify, and then spending a few hours each quarter reviewing your current allocations and shifting money to keep things balanced is *not* a lot of time required. You can even hire a fee-based financial planner to do it for you.

If you're properly diversified, and sticking with an investment plan, then even when the market turns down, you will generally:
a) Not suffer as badly as the idiots who sink all their money into their company's stock purchase plan;
b) Not suffer as badly as the fools who see the numbers drop and panic, selling everything and locking in their losses.

If you consider investment to be nothing more than gambling, you will never succeed at it. If you understand a few basic principles and stick to a plan, you can do quite well, even in the inevitable down cycles.

Re:Even Higher Speed! (1)

tehcyder (746570) | more than 3 years ago | (#35210664)

Looks like somebody doesn't know about dollar cost averaging and long term investment in a diversified portfolio.

Fuck me, Oscar Wilde is alive and well and posting on slashdot.

Re:Even Higher Speed! (1)

Americano (920576) | more than 3 years ago | (#35211346)

I'll assume you're aware that dollar cost averaging and diversifying a portfolio for long term gains are accepted (and proven) methods for investing that greatly eliminate the volatility of your portfolio in what is, essentially, a cyclical market. Investments over the last decade have absolutely made money if you spent a few days learning how to invest, and then a few hours each quarter balancing your portfolio to match your plan.

The stock market is not a "this week, this month, this quarter" endeavor. If you want to make money, worrying about a downturn this year is stupid. If you're so close to retirement that you can't afford to ride out a downturn, then your money should be in safer investments - bonds, money market mutuals, or hell, even CDs and savings accounts if you're truly paranoid. If you're not that close to needing the money to fund retirement, then you keep investing in well-run low-cost mutual funds and make sure that your portfolio is well-diversified, EVEN during the passing downturns, because the overall trend of the market is up - it always has been, and always will be, barring some sort of extinction-style event which leaves entire swaths of the planet uninhabitable and barren.

So, since I've generously assumed you're aware of these basic facts of investing and financial markets, care to explain the joke?

Re:Even Higher Speed! (1)

Permutation Citizen (1306083) | more than 3 years ago | (#35208890)

One social benefit of HFT is putting day traders back to real work.

get the fact (5, Informative)

DUdsen (545226) | more than 3 years ago | (#35207904)

Wasn't this the MS get the fact showcase as to how much better ms.net and sql server were compared to linux? Before the system came crashing down and latency became an issue?

Re:get the fact (4, Informative)

David Off (101038) | more than 3 years ago | (#35208356)

Yes, it was one of them. I worked on another Reuters Intelligent Advisor which ran like a 3 legged dog, a very expensive dog, until someone did the decent thing and shot it through the head.

I don't think RIA's expensive failure can be wholly blamed on .net. I think the technical team deceived management and probably themselves about what they could do. They had drunk the SOA/Web Services kool aid and the architecture was basically wrong. I suspect a number of devs saw the project as resume keyword fodder.

Re:get the fact (4, Interesting)

miffo.swe (547642) | more than 3 years ago | (#35208468)

Still, Microsoft was heavily involved on every levels of the project. If Microsoft cant make .net / MSSQL work and design it right, who can?

Re:get the fact (1)

jo_ham (604554) | more than 3 years ago | (#35208732)

Jimmy Hoffa.

Re:get the fact (1)

KingMotley (944240) | more than 3 years ago | (#35209858)

Who from Microsoft? Are you talking about the intern that graduated college 6 months ago and got assigned the project, or are we talking about someone who actually knows what they are doing? You talk as if suddenly Microsoft turned the entire company and made making that project work their #1 priority, which isn't nearly the case.

I can have a team write a similar version on linux and (pick your language) that does the same thing, only worse with more bugs and slower, as well. It's really not that hard.

Re:get the fact (1)

Viol8 (599362) | more than 3 years ago | (#35211120)

I think its safe to assume that MS are NOT going to put a trainee on a project that involves one of the worlds major stock exchanges that would be a major showcase for their technology.

Re:get the fact (0)

Anonymous Coward | more than 3 years ago | (#35212590)

I think you assume too much. Like it was Microsoft's decision, rather than the client.

Re:get the fact (0)

Anonymous Coward | more than 3 years ago | (#35211292)

You are an idiot.

Yeah, in a project like this MS surely assigned an intern who graduated 6 months ago.
What a tool...

Re:get the fact (1)

tokul (682258) | more than 3 years ago | (#35212178)

If Microsoft cant make .net / MSSQL work and design it right, who can?

There is one person, but God does not code in C#. She prefers Assembler.

Re:get the fact (0)

Anonymous Coward | more than 3 years ago | (#35213830)

Part of it was this was the first time it was used for this kind of application. Other exchanges moved from Unix mainframes to Linux servers which isn't that large a leap as Linux had been tested and optimized for high performance and high reliability. Windows and .Net had not been. Unfortunately it was used in an industry that does not tolerate any downtime.

I never got what (0)

Anonymous Coward | more than 3 years ago | (#35208768)

the hell has this had to do with Microsoft (OFCOURCE their marketing department was going to paint it as a MS win anyway). The problems/bugs in the previous system were in code that Accenture shipped (Though I think they were helped by MS to some extent), not at the OS level or in SQL server. Its like blaming Bjarne Stroustrup or the authors of libstdc++ if your C++ app has bugs.

Although.. I do like the fact that this generates positive PR buzz for the Linux brand as safe and stable and corporate friendly.

Incorrect (NOT Linux) but rather a proprietary one (0)

Anonymous Coward | more than 3 years ago | (#35212722)

Wasn't this the MS get the fact showcase as to how much better ms.net and sql server were compared to linux? by DUdsen (545226) on Tuesday February 15, @05:56AM (#35207904)

Here is something you & the other "FUD spreaders" around here ought to be made aware of:

---

"LSE denied that the collapse was TradElect's fault" - http://blogs.computerworld.com/london_stock_exchange_to_abandon_failed_windows_platform [computerworld.com] by Stephen J. Vaughn-Nichols

---

TradElect &/or InfoLect being the Microsoft based system - & mind you also, it lasted just fine from 2007 until the crash that occurred, & from what I have been reading about it, it happened on the biggest volume day that exchange ever saw due to some takeover... it remains to be seen if Linux based MilleniumIT's system will handle THAT level of "load" too...!

ALSO?

See subject-line, because Linux was not in place at LSE before now, afaik. There was this:

Sequence Programme and Stock Exchange Electronic Trading Service (SETS) between 1994 and 1997

that WAS there, before Windows Server 2003 + SQLServer 2000 (I bolded that, because that was the problem, imo @ least: An old version of SQLServer, which isn't NEARLY AS GOOD as SQLServer 2005 was, & less so than SQLServer 2008) even?

("SETS" seems to have been a proprietary system of some sort, because I cannot find, after a LOT of "digging online" too mind you, EXACTLY what made it up! IF anyone can find it, please reply & post the data... thanks in advance!)

Anyhow - that was there, SETS, prior to Windows Server 2003 + SQLServer 2000 (which were being used, per my statement above, and. both are now out-of-date anyhow, because newer versions are out (Windows Server 2008 and SQLServer 2008)).

Now, where Microsoft HAS experienced successes on a Stock Exchange, has been NASDAQ.

The combination of:

Microsoft Server 2003 (clustered)
IIS
SQLServer 2005

Has been successful acting as "the official trade data dissemination system" there, for years now. With 24x7 "uptime" too, no less!

APK

P.S.=> Does it get attacked? You betcha:

http://news.slashdot.org/story/11/02/05/1723227/Hackers-Penetrate-Nasdaq-Computer-Networks [slashdot.org]

(No, I didn't HAVE to post that, but that wouldn't be totally fair/honest of me either to omit it & it'd open me up to "attack" on my point above so... there ya are!)

NYSE & Chi-X do well also, so far @ least, for stability, using Linux though. I won't omit stating that fact either!

Then again, as far as attacks though, getting "back on track" here?

Every stock exchange, gets "hit"... and A LOT (makes sense... Dollars & CENTS): That's where BIG money can be made, via attempts @ data alteration...

(One must love these Linux shills, trying to tell lies via their "FUD" tactics, because usually, they screw things up like DUDsen has... I state that, because it's ONLY A MATTER OF TIME before the LSE, on Linux, gets hacked/cracked too - because of the incentives (big coins))... apk

Re:Incorrect (NOT Linux) but rather a proprietary (0)

Anonymous Coward | more than 3 years ago | (#35216228)

The stability of the new system may be unproven but TradElect was no longer able to compete with the alternative venues that have been spring up in latency terms. BATS Europe & Chi-X were spanking it on order entry latency and they didn't require writing to a completely proprietary messaging interface to get the best possible latency as TradElect did, either. It was a bit of a panic buy but the LSE had reason to be browning their pants with the way their market share was collapsing.

Latency in DB environs? Needs Ramdisks (not FLASH) (0)

Anonymous Coward | more than 3 years ago | (#35217626)

"BATS Europe & Chi-X were spanking it on order entry latency" - by Anonymous Coward on Tuesday February 15, @06:54PM (#35216228)

Imo, to stop latency problems? They should have been using Ramdisks for their databases @ the very least (SSD's as they are nowadays called, but NOT "flash RAM" type, as there are faster ones) @ LSE then, imo...

Especially in DB-driven scenarios like theirs (for as many tables/device as they can fit on them).

That works, bigtime, & especially for reducing latencies.

And again, & I want to "*stress this*" - SSD's not based on FLASH RAM technology either, especially in write driven DB scenarios (such as temp tables/devices). On FLASH ram SSD's, it wouldn't be as good, as they have slower writes (no matter what).

(Makes me wonder IF they did use them in fact, since you point that out as a possible factor for the change).

Between that, & imo @ least, using SQLServer 2000 (vs. 2005 or 2008 in clusters) is another.

APK

P.S.=> Heck, myself, as a "mere consumer" have one on my setup (& I have since the mid 2002 in hardware, via a CENATEK RocketDrive 4gb PC-133 SDRAM PCI 2.2 bus driven & also a Gigabyte IRAM 4gb DDR4 PCI-Express x4 bus driven, SATA I bus driven) - they're great for more speed... especially in DB work, but I also place my:

---

1.) Pagefile.sys (Windows) or Swapfile Partition (Linux) onto it

2.) Webbrowser caching

3.) Temp Ops (via the %tmp% and %temp% environmental variables)

4.) Logging (both from apps & the OS)

5.) Print Spooler location

6.) %comspec% location (via the environmental var., comspec)

---

Each one not only acts faster now, with FAR lower latency than from HDD (especially the C drive, which is busy as is) by offloading my C: drive from those duties, & lessening fragmentation on it as well (just because it houses my OS, programs, & sometimes even data I have program acting on, but usually these are moved to disks that are bigger than my 4gb sized SSD's...)).

apk

Re:Latency in DB environs? Needs Ramdisks (not FLA (0)

Anonymous Coward | more than 3 years ago | (#35224876)

Come on, man. That stuff is basic tuning. People have been using in-memory databases for performance in systems like this since time immemorial. If they didn't do it, they don't belong in charge of a primary school computer cluster never mind a major stock exchange.

Yes, I know (Ms-TechEd 2000-2002 here for that) (0)

Anonymous Coward | more than 3 years ago | (#35226832)

"People have been using in-memory databases for performance in systems like this since time immemorial." - by Anonymous Coward on Wednesday February 16, @04:02PM (#35224876)

Yes, I am one of them (if not the first, OR, one of the first to do so that is recorded from "way back when") & before many larger DB engines really did "in memory devices" on PC/Server type systems:

---
Windows NT Magazine (now Windows IT Pro) April 1997 "BACK OFFICE PERFORMANCE" issue, page 61

(&, for work done for EEC Systems/SuperSpeed.com on PAID CONTRACT (writing portions of their SuperCache program increasing its performance by up to 40% via my work) albeit, for their SuperDisk & HOW TO APPLY IT, took them to a finalist position @ MS Tech Ed, two years in a row 2000-2002, in its HARDEST CATEGORY: SQLServer Performance Enhancement).
---

So, as you can see, I have been doing that, actively... I just thought it's worth noting/mentioning, vs. what you brought up as a difficulty for they:

LATENCY!

(In fact, as far back as 1996 thru 2002, I was suggesting doing it before SQLServer did its OWN "memory device", by putting such devices onto a SSD, or giant Ramdisk in memory in fact, which is HOW "SuperDisk" was used by EEC Systems for that purpose (they're now SuperSpeed.com)).

APK

P.S.=> Nowadays, it may be "common-practice" but, I thought I'd mention it here... because it works! You see companies doing it today, because of the lower latency of SSD's, but I was doing it "way back when"... because it works! apk

Re:Incorrect (NOT Linux) but rather a proprietary (0)

Anonymous Coward | more than 3 years ago | (#35222018)

None of that matters. You're trying to have a reasoned debate with apk. It doesn't matter your facts or your logic. He's never wrong about anything despite lack of experience or knowledge. He is the ultimate Slashdot troll.

He must have gotten the better of you before (0)

Anonymous Coward | more than 3 years ago | (#35226558)

Because you are posting as anonymous coward it's quite obvious that the ac apk has gotten the best of you before here.

Novell SUSE Linux technology? (0)

Anonymous Coward | more than 3 years ago | (#35208350)

I think it should be "Linus Torvalds and friends Linux Technology"?

Highly Reliable Times (1)

nOw2 (1531357) | more than 3 years ago | (#35208412)

I know of a newspaper that won't be publishing this story...

Re:Highly Reliable Times (0)

Anonymous Coward | more than 3 years ago | (#35209022)

You can say many things about Micro-Soft, but one thing is certain: You can always count on them for being honest and doing the right thing, just look at their slogan "Don't be evil". I am sure that a special issue of Highly Reliable Times containing a reatraction will hit the streets ASAP.

Stable by insistence? (1)

seniorcoder (586717) | more than 3 years ago | (#35208904)

>>LSE chief executive Xavier Rolet has insisted that the exchange, once a monopoly, will deliver record speed and stable trading
I'm not sure, even if a senior manager insists on stability, that it is guaranteed to happen. What he could do is to insist that, if any instability occurs in the new system, the workforce positions will also become unstable.

"Runs on Linux" But what is the app written in? (1)

exabrial (818005) | more than 3 years ago | (#35210188)

I hear a lot of fanfare about the OS, but what is the danged trading app written in? You can't "write something in linux"... is it C, Java, COBOL what?

Re:"Runs on Linux" But what is the app written in? (1)

rubycodez (864176) | more than 3 years ago | (#35210390)

the FA answers your question, if you would bother to RT thing.

running on SUSE Linux (1)

doperative (1958782) | more than 3 years ago | (#35210780)

> At 8am today, the exchange’s main venue went into live trading with the Millennium IT matching engine, developed in C++ programming language and running on SUSE Linux ..

Why did they choose SuSE and how does Microsofts intellectual property patent covenant with Novell impact on the decision. Is part of what the LSE paying to Novell being funneled back to Redmond. Is this the future of Microsoft innovation ?

LSE investigating potential IT problem at close (3, Interesting)

DMandPenfold (1108673) | more than 3 years ago | (#35211512)

London Stock Exchange investigating potential system problem on closing auction http://www.computerworlduk.com/news/it-business/3261177/london-stock-exchange-investigating-potential-system-problem-on-closing-auction/ [computerworlduk.com] The London Stock Exchange has said it is investigating an issue on its main cash market, which yesterday implemented a new matching engine based on Linux technology. The LSE declined to give details on what had happened until the investigation was complete, and it is not known whether the new system was responsible. The system, written in C++ language on Novell SUSE Linux-based datacentres, replaced a Microsoft .Net-based system that ran on Windows Server and SQL Server.... http://www.computerworlduk.com/news/it-business/3261177/london-stock-exchange-investigating-potential-system-problem-on-closing-auction/ [computerworlduk.com]

Hope not.. (2)

ideaz (1981092) | more than 3 years ago | (#35211934)

the next thing they install is WINE.

Re:Hope not.. (1)

queBurro (1499731) | more than 3 years ago | (#35214072)

ahhh! the day after my remaining mod point expired
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