Volatile market puts trading venues under pressure

Stock Market technology has been put to the test this week, as the financial sector stocks went into freefall.

Stock Market technology has been put to the test this week, as the financial sector stocks went into freefall.

Robin Paine, chief technology officer at the London Stock Exchange, described trading levels as unprecedented.

"Periods of high volume trading leads to high loads on all components of the infrastructure such as networking and CPU utilisation," he said. "The investments made in technology pay off at times like this."

The London Stock Exchange increased the average daily number of trades last month by 48% to 1.2 million compared to the same period last year.

Firms that provide critical trading data to investors have also come under pressure.

Jon Cosson, head of IT at stockbroker JM Finn, said the company is experiencing intermittent problems with the data and trading software suppliers they use because of the high volumes of trades.

Brian Taylor, managing director at BTA Consultancy, said the growth in the number of exchanges under the recent Mifid legislation has led to an explosion in market data.

"In the old days the shares of a company were listed on one stock exchange and the information providers would get one update from one exchange when a company's price changed. Now they get 10 or more for every stock because they are quoted in multiple venues," said Taylor.

Trading venues have complex core trading platforms, which enable high volumes of trades to be processed in milliseconds. This puts pressure on the IT infrastructures that route, process and store trades and related information.

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