LSE Speeds Real-Time Stock Pricing

The new technology will enable the London Stock Exchange to give dealers access to data in "2 milliseconds," says Robin Paine

The London Stock Exchange (LSE) has completed a major project that will give dealers faster access to prices than ever before.

"It does it in two milliseconds," says Robin Paine, the LSE's CTO. "The technology it is replacing did it in 30 milliseconds."Time lags in price information can cause problems on trading floors, causing some traders to be wary of fast-fluctuating prices. This means that the competition between exchanges to provide the best trading service is forcing them to develop faster systems.

The data delivery system is a culmination of efforts from the likes of HP (hardware), Cisco (networks), Microsoft (software) and Accenture (project management), which all worked with the exchange's IT team to build the system, Infolect.

"There are a number of benefits," adds Paine. "Probably the most valuable one is the reduction in latency of price dissemination.

"The faster you get prices out the higher the probability of a trade going ahead. Since we went live with this we've seen 49 out of 100 busiest ever days. "

The exchange's system broadcasts 20 million messages a day to more than 100,000 terminals in more than 100 countries.

Infolect is part of a four-year programme of change, Paine said.

"Having proved the success of this, next year we intend to go ahead with an upgrade of our trading system. But this plan has one more major phase to go.

Paine said there has been a rapid take-up of algorithmic trading solutions by client firms.

"These programmed systems are designed to target split-second nuances in the market, and there is a big demand to cut latency times," he said.

"At the same time, in the last five years volumes on our order book have seen a compound annual growth rate of 43 percent, so scalable technology is a fundamental requirement.

"We have always provided a first-class service, but we can now claim to be the fastest in the world as well," said Paine.


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