July 02, 2009

The New York Stock Exchange (NYSE) said it has reduced the time it takes to execute an order to five milliseconds from 105 milliseconds, with the implementation of the new NYSE Super Display Book system (SDBK) for processing orders.

As a result, NYSE customers are receiving trade executions and reports within five milliseconds, as well as order and cancellation acknowledgments in just two milliseconds, according to the release. To clarify the measurement further, an exchange spokesman said, “The five milliseconds are measured from the time the order hits our gateway through the time it sends the execution confirmation back to the customer. If it’s a cancellation or an acknowledgment, that takes two milliseconds.”

NYSE SDBK replaces the well-known SuperDOT order delivery and processing systems, which has been in place for 33 years and was synonymous with electronic trading — as well as the Post Support System, which routed orders to the trading floor. NYSE SDBK is a server-based system based on NYSE Arca’s industry leading trading engine, which provides increased throughput, flexibility and scalability as well as lower operating costs compared with the mainframe platform that supported SuperDOT.

“We have improved system latency to the single digits today from 350 milliseconds in 2007,” stated Louis Pastina, EVP, NYSE Operations. “NYSE customers can now access our market with greater speed and assurance, and their orders will be delivered and executed more efficiently than ever,” stated Pastina in the release. “For the first time on NYSE, customers can employ the benefits of competitive speed and automation in addition to our longstanding value of high-touch price discovery on the only U.S. exchange equities trading floor,” Pastina further stated.

The NYSE SDBK rollout took three months and completes an ambitious systems re-architecture project that NYSE initiated just 18 months ago, according to the release. During this time, NYSE has completely replaced its order entry, order database and routing systems, market data systems and components of its post-trade system. To accomplish this infrastructure overhaul, the NYSE has leveraged leading technologies it gained from recent acquisitions and mergers, including systems from NYSE Arca, Wombat (now part of NYSE Technologies) and Euronext.

Additionally, NYSE Amex cash equities will complete their move to NYSE SDBK in August. Later this year, NYSE Euronext's Universal Trading Platform will be rolled out to NYSE and NYSE Amex as well as NYSE Arca, bringing additional gains to transaction speed, the release noted.

Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in ...