Nasdaq connects faster-trading extranet

The Nasdaq Stock Market last week rolled out an extranet-based trading network for member companies that is twice as fast and can handle twice as many trades as its existing trading system.

The $US600 million TCP/IP-based network, built and maintained by MCI WorldCom, is equipped to handle 4 billion shares of stock per day and could accommodate an 8 billion-share day if necessary. Nasdaq averages 985 million shares per day and reached a peak of 1.4 billion shares in April.

The Enterprise Wide Network II (EWN II) was designed so that it wouldn't have a single point of failure. Each member firm has two "virtual" T1 connections, so that if one connection is taken out for some reason (such as a backhoe cutting into a fibre-optic link), the network can "reheal" itself within 11 seconds without affecting the member firm, said Gregor Bailar, executive vice president and CIO at the National Association of Securities Dealers, Nasdaq's Washington-based parent.

By doubling members' network speeds from 56Kbit/sec connections, Nasdaq and its members are also better positioned to handle a hefty uptick in traffic when two upcoming projects go live. Those include Nasdaq's plans to add trade-matching capabilities from Optimark Technologies next month, along with Wall Street's shift to decimal-based stock pricing, which will be phased in starting in July, Bailar said.

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