LONDON / NEW YORK, 19 th April 2010 - The race to find the fastest matching engine amongst exchanges and MTF platforms just went ballistic. A matching engine so fast it required new measurement technology to verify its speed is being launched by ALGO Technologies, the new company headed by Hirander Misra, who previously tore up European exchange orthodoxies as a founder and COO of Chi-X Europe.
The new trading system - named ALGO M2 - has an external round-trip latency of just 16 microseconds measured from customers sending orders and receiving an acknowledgement or trades. That compares with the current leading European platform latencies of approximately 400 microseconds, while legacy system latencies at some exchanges are substantially higher. ALGO M2 can therefore process 15-30 trades in the time it takes for the price to move once on other platforms:
Source: ALGO M2 (CorvilNet latency measurement based on sending over 300,000 messages per second across multiple stocks and client connections. As a comparative example, the whole market in Europe across all exchanges/ MTFs is approximately only 75,000 messages per second.); Exchanges/ MTFs: Exchange web sites and press releases. Please note: One microsecond is one millionth of a second. One millisecond is one thousandth of a second. ALGO M2’s round trip times are therefore 16 millionths of a second.
ALGO M2 is distinguished from other systems by a number of specific features designed for contemporary markets. Legacy systems pre-date today’s automated trading practices from an era when most orders were entered manually and have been adapted for them, not always satisfactorily. ALGO M2 performance, reliability and scalability were designed in from the start, leading to an internal latency to process an order at 500 nanoseconds creating the mathematical capacity to process two million messages per second on a single matching engine. This is ground breaking and for a distributed software application, numbers that seemed impossible to achieve until now. Some exchange systems in the quest for latency reduction have in recent times become unstable when pressed to their limits in terms of messaging rates as they are not designed for this sort of trading.
The ALGO Technologies matching engine is so fast the company had to develop new latency measurement resources to quantify it. Using a process known as Field Programmable Gateway Array Hardware acceleration it first established the values before performing independent verification and benchmarking using CorvilNet, a leading and respected independent latency management system.
ALGO M2 will be made available under license to exchanges, MTFs, brokers/dealers and internalisers from 24 th May with the launch of ALGO Technologies’ global exchange services business.
Hirander Misra, co-founder and CEO of ALGO Technologies which developed ALGO M2, said “Many legacy exchange systems are up to 20 years old while most of the current fastest trading engines date back from design principles introduced by ECNs in the US well over 10 years ago. This is no longer about slicing performance. We’ve taken a fundamentally new approach to matching engine construction and built a new trading system from first principles to put an end to the latency debate. Users of matching technology have previously been offered legacy technology at premium rates for far too long. ALGO M2 is also easily extendable beyond equities and ETFs into other asset classes; it’s near light speed and throughput being very conducive to options trading, for example.”
Donal Byrne, CEO of Corvil, commented,” CorvilNet is unique in its ability to monitor latency with microsecond precision for electronic trading and market data applications and infrastructure. We are pleased that CorvilNet was used by ALGO M2 to measure trading system latency at this unprecedented low level.”
Alexei Lebedev, co-founder of ALGO Technologies and Chief Architect of ALGO M2, added “ALGO M2 offers unrivalled performance, reliability and scalability, with the added advantage of being ready now with all the major functionality that you would expect. ALGO Technologies will also provide ALGO M2 with full open access to the code across all components deployed unlike the majority of current trading platform providers. This will ensure that users can avoid expensive software support contracts and have the option to handle their own platform maintenance and development through initial training and ongoing support as required.”
Notes to editors
About ALGO Technologies
ALGO Technologies is a next generation trading technology firm providing differentiated high speed, low cost products & services to allow ‘trading automation without complication’. The company’s solutions include the provision, maintenance & support, of near-zero latency market data, direct market access, smart order routing, in-house developed feed handler technology, and execution & matching technology. ALGO Technologies’ solutions are built by a team with many years of expertise in electronic trading across the value chain.
About ALGO M2
ALGO M2, Key qualities include:
• 16 microsecond mean round trip acknowledgement time for orders from outside the firewall
• 320,000 orders/sec per matching engine at rated latency
• 180,000 fills/sec per matching engine at rated latency
• First fill sent in the same message as acknowledgement
• No single point of failure
• Real-time switching between primary and secondary
• High compute density reduces chance of hardware failure
• Transaction guarantee via end-user commit notifications
• Massive headroom for growth
• Supports thousands of simultaneous client connections
• Cluster architecture easy to manage and extend
• Multiple gateways on one client gateway blade server
• Modern design for post-MiFID market features
• Built-in risk checks for sponsored access (third party access via a member firm)
• Integrated distribution of symbol data and tick tables
• Tight integration with compliance and monitoring tools