Going Electronic

By Stan Gibson  |  Posted 2006-09-07 Print this article Print

The wholesale adoption of electronic trading would spell the end of the exchanges traditional "open outcry" system, in which traders shout and give hand signals to trade commodities contracts. But NYBOTs members are adamant in retaining the traditional market, with all its color and seeming chaos. Electronic trading is therefore part of NYBOTs newest backup strategy, according to Gambaro.

"The first failover would be to Long Island City. The second would be electronic trading," Gambaro said. "We probably would do a combination of Long Island City and electronic."
An electronic trading system would come in handy in the event of a disaster, such as a pandemic, that would prevent traders from reporting to the trading floor to carry out their work. "If people could not get into the facilities, they could trade without a trading floor," Gambaro said.
Sticking with open outcry is important to the exchanges members. "The exchange is committed to open outcry until such time that its proven to be ineffective. Traders tell us what works and what doesnt," Gambaro said. Disaster recovery roundtable: Whats the worst you can plan for? Click here to read more. Nonetheless, there is pressure to go electronic. "The presence of an electronic trading system is required for us to be more competitive on financial processes," Gambaro said. To that end, Gambaro and the exchanges other leaders have been looking at contenders to provide an electronic system. The Chicago Board of Trade is one of several providers vying for the contract, Gambaro said. NYBOTs criteria for the system, according to Gambaro, are the effectiveness of the platform in terms of uptime, disaster recovery capabilities and cost. A decision will be reached in the fourth quarter, with deployment slated for the first half of 2007, Gambaro said. The electronic trading system will be the latest in a steady stream of IT enhancements made by the exchange in the last five years. NYBOT has moved off of expensive Tandem Himalaya mainframes as its principal trading engines to IBM Intel-based, rack-mounted servers, running Oracle database software. The cheaper servers are arrayed in a grid-style configuration, Gambaro said. "The network is set up not to fail. It will be cheaper than doing the same type of business on the mainframe. Maintenance and licensing is not as high as on the mainframes," he said. In addition to the new servers, NYBOT has also implemented new mobile device and tablet computer support for traders. The past year has seen a top-to-bottom review of system resiliency, including security in sending and receiving of data covering both internal and external intrusion detection systems. Last October, NYBOT participated in a disaster recovery exercise across the futures industry in which exchanges tested their backup sites. But the pictures not all rosy. Five years of steady growth has brought about some problems along with prosperity. The Long Island City site, which served so well in the aftermath of 9/11, would be hard-pressed to handle the size to which NYBOT has now grown. Said Gambaro: "We might have a problem because there might not be enough room there." Check out eWEEK.coms for the latest news, views and analysis on servers, switches and networking protocols for the enterprise and small businesses.

Stan Gibson is Executive Editor of eWEEK. In addition to taking part in Ziff Davis eSeminars and taking charge of special editorial projects, his columns and editorials appear regularly in both the print and online editions of eWEEK. He is chairman of eWEEK's Editorial Board, which received the 1999 Jesse H. Neal Award of the American Business Press. In ten years at eWEEK, Gibson has served eWEEK (formerly PC Week) as Executive Editor/eBiz Strategies, Deputy News Editor, Networking Editor, Assignment Editor and Department Editor. His Webcast program, 'Take Down,' appeared on Zcast.tv. He has appeared on many radio and television programs including TechTV, CNBC, PBS, WBZ-Boston, WEVD New York and New England Cable News. Gibson has appeared as keynoter at many conferences, including CAMP Expo, Society for Information Management, and the Technology Managers Forum. A 19-year veteran covering information technology, he was previously News Editor at Communications Week and was Software Editor and Systems Editor at Computerworld.

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