You don’t have to use the latest and greatest tech – you can always just get out of the (trading) business.

That was the message from Peter Lankford, co-founder of STAC, the New York-based Securities Technology Analysis Center.

“Trading firms can continue to invest or they can choose to exit markets that require high performance technology. It’s that binary nowadays. There is innovation all over the place. I don’t remember when so much was focused on industry performance.”

Made up of seasoned trading market specialists, STAC set up to help firms by testing new combinations of hardware and software and measure the performance. Lankford said the market has seen a huge proliferation of viable solution stacks, market data vendor, event processing engines, fast operating systems and new processors.

“Nobody has time to test all this stuff.” Nor do they have the equipment and skills to measure latency in the sub-microsecond range. STAC has the expertise, and it can set up tests where all but one element remains constant. Then it can swap out processors, for example, to see what difference a new chip will make.

2007 saw the trading low latency arms race gain pace, a pace in which STAC played an important part as route to achieve public quality independent test results. The emerging issue however was that while test results made impressive reading in their own right – and drew the markets’ attention, it was difficult to draw comparisms and identify objective differentiation between solution stacks under test.

Responding to this – in September 2007 STAC established under its auspices the benchmark council – a council of market firms and significant vendors – with the objective of defining de fcato standard tests for the major workloads in the trading cycle.

STAC, in full view of the council, is now developing a spec for direct exchange feed or ticker plant solutions, known as test STAC M1, distribution functions will be measured via STAC M2 and analytics and data management (CEP and its derivatives) are on the drawing board.

That gives us high fidelity replays of live feeds, so we can get the spikiness of the markets with all their bursts.”

Users who don’t need the fastest speed, such as pension funds and insurers, can use the STAC labs to see the tradeoff between very fast and very expensive and reasonably fast and less expensive.

Intel and STAC have been collaborative throughout recent months – with the common view of establishing testing initiatives which are useful to the market. This is slated to grow through sharing lab facilities and working in virtual skills teams which best leverage STACs trading domain expertise and Intel’s infrastructure engineering, tuning and optimization capabilities via the fasterLAB centre.

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Filed under: Issue 5 - Summer 08, Trading