Joab Jackson: How Linux dominates Wall Street

With the rapid development of stocks, bonds and derivatives trading businesses, global financial exchanges are looking for a unified Linux system, at least based on a Linux kernel developer. LinuxCon

annual general meeting recently held in Vancouver on, Linux kernel contributor Christoph Lameter discuss how Linux is widely used in financial exchanges, those high speed for stocks, bonds, derivatives and other financial instruments, Computerized trading station.

Lameter in an interview with IDG, said, Linux as an alternative to traditional Unix has been rapid transmission of information by means of its ability to Caozuoxitong core, the financial sector has become the dominant product. He suggested that without the open source operating system, emerging high-frequency trading (HFT) is unlikely to occur. Lameter itself is employed as a consultant on an exchange (he doesn't want to disclose which exchange), and his job is to equip large-scale Linux clusters.

New York Stock Exchange using Linux

world's largest exchange & mdash; & mdash; the New York Stock Exchange (NYSE) Euronext is run on the basis of Linux system . The Linux system generates 1,500,000 quotes per second, processes 250,000 orders, and provides confirmation of each transaction within 2 milliseconds.

As of 2007, Wall Street Exchange, still use large-scale Unix systems, such as Hewlett-Packard's HP-UX, IBM's AIX and Sun's Solaris. However, in recent years, Linux has penetrated the market, and has begun to emerge in the field of auxiliary systems, and then run some core trading systems.

& ldquo; Solaris and AIX release cycle is very long, last updated two to three years. Linux can be changed within one month ‘changes as needed & rsquo;. ”Lameter said.

& ldquo; financial exchanges need their servers to execute trades as quickly as possible. Under the process of trading billions of dollars a day, even a few milliseconds of advantage is competitive. This high-intensity environment creates a hotbed of innovation that cannot be reflected in the annual release cycle. ”Lameter explained.
“ The exchange did find that the lowest latency solution can only be achieved with Linux. & rdquo; Lameter said, "old Unix can not run faster than Linux. A key attribute is the TCP/IP stack. The stack configuration determines the speed at which information is transferred between the two systems. Another attractive attribute is the modified scheduler, which takes the process of executing a transaction as an example. It guarantees that the process will not be interrupted once it is run. Finally, thanks to a large number of voluntary developers, Linux can provide new hardware drivers faster than those of larger Unix vendors.

flexibility is important

& ldquo; Linux while allowing financial companies can modify the source code to accelerate the speed of performance, depending on how much courage Exchange. & rdquo; Lameter said that it also said that the US Nasdaq is also using an improved version of the Gentoo Linux system.

& ldquo; other exchanges on the use of existing systems, and consulting services by adjusting the settings to achieve maximize performance. Red Hat Enterprise Linux is now the mainstream Linux distribution used by the exchange. “The customers are the Chicago Mercantile Exchange, the New York Mercantile Exchange, the Frankfurt Stock Exchange, the European Futures Options Exchange, and the Philippine Stock Exchange,” Lameter said. & Rdquo;

& ldquo; a typical exchange architecture consists of a number of different subsystems, & rdquo; Lameter said, & ldquo; One such component is matching engine. The matching engine pairs buyers and sellers to trade. The engine captures all the information of the transaction for tracking and editing. Specific engines handle specific stock combinations. On average, an exchange will have 60 to 100 servers to handle pairing. & rdquo;
An exchange will also have a front-end processor connected to the trader. The system usually consists of 500 to 1000 servers. “Traders are not allowed to connect to the matching engine privately. ”Lameter said. Instead, the trader's machine is connected to the front-end processor, which then checks the transaction, verifies its operability, and then sends the trade order to the matching engine. Once the transaction is completed, the front-end server system will feed back the information to the trader.

On the software side, many major exchange still using software developed in-house, such as the use of Java or C ++ and other languages. However, some exchanges are switching to commercial packages, at least for certain tasks, such as messaging. Tibco's messaging software and Informatica's 29West are the mainstream messaging tools in the field. Many exchanges also adopt the emerging messaging standard, the middleware-independent messaging API (MAMA) that supports Linux.

Windows, swallow


Microsoft has yet to make significant progress on the market in the face of Linux. Lameter said that "windows" is mainly classified as a background management system. "He claims that Windows is characterized by a longer latency than Linux, and said that in 2009 the London Stock Exchange had tried to use Windows Server but later gave up.

Microsoft declined to comment on the London Stock Exchange, while Microsoft claims that its spokesman does have a large number of customers in financial services, such as Thomson Reuters and KAS Bank. Microsoft also cited 2010 IDC research, which shows that Microsoft has a 74.7% server market share worldwide, but Linux only has a 21.4% market share.