Close
  • Latest News
  • Artificial Intelligence
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
Read Down
Sign in
Close
Welcome!Log into your account
Forgot your password?
Read Down
Password recovery
Recover your password
Close
Search
Logo
Logo
  • Latest News
  • Artificial Intelligence
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
More
    Home Latest News
    • Servers

    Open Source Making Inroads on Wall Street

    By
    Peter Galli
    -
    April 24, 2006
    Share
    Facebook
    Twitter
    Linkedin

      NEW YORK—Linux and open-source technologies are here to stay and will continue to make inroads into the financial services sector, speakers from both the vendors and Wall Street communities said here at the Linux on Wall Street conference.

      In a session titled “Leveraging Open Source to Build Cutting Edge Trading Applications,” Jeremy Lehman, chief software architect for global equities at Citigroup, told attendees on April 24 that open source has changed the traditional buy-versus-build scenario to one of buy, build or extend.

      “Open source allows you to add features that are very specific to your business, while it also provides effective alternatives to J2EE [Java 2 Platform, Enterprise Edition], which has perhaps not lived up to expectations,” he said.

      /zimages/2/28571.gifClick here to read how an open-source framework can make Java easier for developers.

      Lehman and his team are building a new algorithm-based trading system to help align the Citigroup organizational structure, processes and incentives so as to orchestrate deep change.

      Algorithmic trading has four principle challenges: latency and throughput, market data, productivity, and market access, Lehman said, adding that the challenge is not coming up with new algorithms, but rather translating those into reusable software.

      No single source of data is reliable enough for Citigroups needs right now, he said, and the company needs to be able to translate that data quickly, effectively and accurately while being the first to do that.

      There are a number of innovations coming down the pike from Citigroup on that front, “but were not going to discuss that now,” Lehman said.

      Open source is not in as broad use in other parts of the world as it is in the United States, and Citigroup faces some pressure to use it globally. “But we expect that to change significantly over the next few years,” he said.

      The total cost of ownership is not a primary driver for using open source, Lehman said, but its rather about focus and investing where there would be a distinct advantage to the business.

      /zimages/2/28571.gifRead here about two reports IBM sponsored that laud the benefits of Linux.

      From a Wall Street perspective, the question of using open source involves looking at whether or not the software can create a significant competitive advantage.

      If the answer to that is yes, this then needs to be internally developed. If the software will not bring a competitive advantage, it should be outsourced and acquired from a vendor or found in open source and extended, Lehman said.

      He also recommended that customers not treat vendors just as vendors, but rather create relationships with a small number of those who can provide the products and services to meet their needs.

      While open source is attractive in that it is the easiest migration path from proprietary Unix to Linux on Advanced Micro Devices or Intel chip sets, that software still has a way to go on a number of fronts.

      “A few things remain to be done, especially around performance, as open-source software is made to meet the needs of the majority of users. High-frequency trading is at the 0.1 percentile for performance. That is a good thing though, as it allows companies like Citigroup to develop proprietary technologies for this that enhances our competitive ability,” Lehman said.

      Open-source software also has some missing functional areas, such as on the messaging, business process management and analytics fronts, he said.

      Also, the integration of components into stacks needs more work, as the operating system cycles are faster than the internal certification process, he said.

      “But Citigroup makes extensive use of open source, and it will be an integral part of what we do for many years to come,” Lehman concluded.

      Next Page: Challenges on Wall Street.

      Page 2

      For his part, Larry Tabb, CEO of the Tabb Group, a financial markets research and consulting firm, said the Wall Street trading environment currently faces a lot of challenges, especially the need to manage high-speed small transactions on a huge volume basis.

      There is also a great need for agility at speeds never seen before, with some 20 firms trying to put out customized trading models to meet the needs of their customers, he said.

      “So, it becomes an arms race for the brokers to develop the most sophisticated systems and get those out to market really quickly. They cannot just go out and create this from scratch every time, and they need an open core set they can leverage,” he said.

      For every trade executed on Nasdaq in August 2005, there were 16 cancellations, a figure that is set to rise to 60 cancellations for every executed trade this year, Tabb said. The number of quotes per trade is also set to rise from 36 in 2005 to 63 in 2006. “This is an enormous amount of data,” he said.

      Open-source trading standards are at the root of this, not on a code basis but around the underlying standard that allows users to communicate consistently.

      This is largely due to The Financial Information eXchange (FIX) Protocol, a messaging standard developed specifically for the real-time electronic exchange of securities transactions, and its penetration on both the sell and buy sides of the business.

      “Open source and FIX are also the salvation as they allow a standardized infrastructure so firms can focus on the value-added states; it jump-starts initiatives. FIX also does not stop vendors from competing in this space,” he said.

      “Linux has also been a tremendous boost to the trading environment as it enables greater control of the server operating system, allows easier clustering and grid marshalling, and lets users leverage less expensive hardware with greater throughput,” Tabb said.

      Linux and open-source technologies are here to stay, and customers need to leverage what is available today but also contribute to the existing pool. “Also, know where open source fits and where it doesnt, and focus on the value-add,” Tabb said.

      Check out eWEEK.coms for the latest open-source news, reviews and analysis.

      Peter Galli
      Peter Galli has been a financial/technology reporter for 12 years at leading publications in South Africa, the UK and the US. He has been Investment Editor of South Africa's Business Day Newspaper, the sister publication of the Financial Times of London.He was also Group Financial Communications Manager for First National Bank, the second largest banking group in South Africa before moving on to become Executive News Editor of Business Report, the largest daily financial newspaper in South Africa, owned by the global Independent Newspapers group.He was responsible for a national reporting team of 20 based in four bureaus. He also edited and contributed to its weekly technology page, and launched a financial and technology radio service supplying daily news bulletins to the national broadcaster, the South African Broadcasting Corporation, which were then distributed to some 50 radio stations across the country.He was then transferred to San Francisco as Business Report's U.S. Correspondent to cover Silicon Valley, trade and finance between the US, Europe and emerging markets like South Africa. After serving that role for more than two years, he joined eWeek as a Senior Editor, covering software platforms in August 2000.He has comprehensively covered Microsoft and its Windows and .Net platforms, as well as the many legal challenges it has faced. He has also focused on Sun Microsystems and its Solaris operating environment, Java and Unix offerings. He covers developments in the open source community, particularly around the Linux kernel and the effects it will have on the enterprise.He has written extensively about new products for the Linux and Unix platforms, the development of open standards and critically looked at the potential Linux has to offer an alternative operating system and platform to Windows, .Net and Unix-based solutions like Solaris.His interviews with senior industry executives include Microsoft CEO Steve Ballmer, Linus Torvalds, the original developer of the Linux operating system, Sun CEO Scot McNealy, and Bill Zeitler, a senior vice president at IBM.For numerous examples of his writing you can search under his name at the eWEEK Website at www.eweek.com.
      Get the Free Newsletter!
      Subscribe to Daily Tech Insider for top news, trends & analysis
      This email address is invalid.
      Get the Free Newsletter!
      Subscribe to Daily Tech Insider for top news, trends & analysis
      This email address is invalid.

      MOST POPULAR ARTICLES

      Latest News

      Zeus Kerravala on Networking: Multicloud, 5G, and...

      James Maguire - December 16, 2022 0
      I spoke with Zeus Kerravala, industry analyst at ZK Research, about the rapid changes in enterprise networking, as tech advances and digital transformation prompt...
      Read more
      Applications

      Datadog President Amit Agarwal on Trends in...

      James Maguire - November 11, 2022 0
      I spoke with Amit Agarwal, President of Datadog, about infrastructure observability, from current trends to key challenges to the future of this rapidly growing...
      Read more
      Applications

      Kyndryl’s Nicolas Sekkaki on Handling AI and...

      James Maguire - November 9, 2022 0
      I spoke with Nicolas Sekkaki, Group Practice Leader for Applications, Data and AI at Kyndryl, about how companies can boost both their AI and...
      Read more
      Cloud

      IGEL CEO Jed Ayres on Edge and...

      James Maguire - June 14, 2022 0
      I spoke with Jed Ayres, CEO of IGEL, about the endpoint sector, and an open source OS for the cloud; we also spoke about...
      Read more
      IT Management

      Intuit’s Nhung Ho on AI for the...

      James Maguire - May 13, 2022 0
      I spoke with Nhung Ho, Vice President of AI at Intuit, about adoption of AI in the small and medium-sized business market, and how...
      Read more
      Logo

      eWeek has the latest technology news and analysis, buying guides, and product reviews for IT professionals and technology buyers. The site’s focus is on innovative solutions and covering in-depth technical content. eWeek stays on the cutting edge of technology news and IT trends through interviews and expert analysis. Gain insight from top innovators and thought leaders in the fields of IT, business, enterprise software, startups, and more.

      Facebook
      Linkedin
      RSS
      Twitter
      Youtube

      Advertisers

      Advertise with TechnologyAdvice on eWeek and our other IT-focused platforms.

      Advertise with Us

      Menu

      • About eWeek
      • Subscribe to our Newsletter
      • Latest News

      Our Brands

      • Privacy Policy
      • Terms
      • About
      • Contact
      • Advertise
      • Sitemap
      • California – Do Not Sell My Information

      Property of TechnologyAdvice.
      © 2022 TechnologyAdvice. All Rights Reserved

      Advertiser Disclosure: Some of the products that appear on this site are from companies from which TechnologyAdvice receives compensation. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. TechnologyAdvice does not include all companies or all types of products available in the marketplace.

      ×