London Stock Exchange averages 100 microsecond trades


London Stock Exchange averages 100 microsecond trades

Karl Flinders

The London Stock Exchange (LSE) completes trades in just over 100 microseconds on average as its latest core trading system beds in.

The LSE main exchange and the multi-trading facility it acquired in 2009, known as Turquoise, now have average times to complete trades of 115 microseconds and 103 microseconds respectively.

The LSE acquired trading software maker MillenniumIT in September 2009 for £18m. It gave the LSE a new trading system to replace its .Net-based Tradelect software, which was unable to keep up with market changes. Tradelect had got trading times down to the low milliseconds, but competitors were surpassing this.

Tony Weeresinghe, who heads up MillenniumIT, says it will soon break the 100 microsecond barrier. "The next release we do should average 75 microseconds," he said.

The MillenniumIT system will soon be able to process two million messages in two microseconds.

Weeresinghe says that being part of the LSE has helped MillenniumIT understand how traders work and as a result developers can fine-tune systems to be better in line with them. This, he says, has enabled MillenniumIT to shave microseconds off trading times.

With investment firms using algorithmic software to automate trading, a millisecond can be a long time. But Weeresinghe says that having the fastest trading speed is no longer the ultimate aim because most major exchanges are about the same. He says it is now about the types of trading the exchange can offer trading firms through its enhanced technology. "You can only get to a certain point and speed will become a commodity."

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