The New York Stock Exchange (NYSE) has rolled out a new Java-based trading platform that includes customized wireless handheld devices for traders, putting an end to the shouts for buy and sell orders that have been the trademark of the nation's oldest and largest exchange.
IBM has partnered with the NYSE in creating the new stock-order management system, NYSE TradeWorks, which was unveiled yesterday. IBM designed 3,000 handhelds that allow floor brokers to send trade tickets electronically to their offices.
The NYSE has been under pressure from all-electronic exchanges, such as Nasdaq, that can perform trades faster. And the venerable stock exchange is now making a move to become a "hybrid," which would allow electronic trading and traditional floor trading to take place side by side.
"If you think about it, part of the role of technology at New York Stock Exchange is to handle increasing volume with the same number of people," said Roger Burkhardt, the NYSE's chief technology officer. He said the NYSE put the new system through the most exhaustive tests it has ever used for any technology, spending more than a year on the rollout before going live last month.
NYSE's TradeWorks order-management system is built on J2EE open systems technology. It replaced the in-house Broker Booth Support System, which connected floor traders to the brokerage back offices that executed the trades. While many floor traders already used handhelds, those devices were consumer-grade products and weren't tightly integrated with their firms' back-office systems.
The new systems offer larger screens and 40 times more throughput than the earlier devices did, according to IBM. The NYSE has bought 3,000 devices and has so far gone live with 650 of the handhelds.
The contract with IBM represents the first time the NYSE has gone with a third-party provider for its trading system. Burkhardt said he's "very happy to be out of the business of writing middleware" but added that he doesn't plan any IT layoffs as a result of the IBM deal.
The TradeWorks system runs on custom-built Linux-based Wintel workstations and HP-UX servers running IBM's Java-based WebSphere middleware. A record of trades and customer information is captured in a DB2 database on an IBM zSeries mainframe on the back end, Burkhardt said.
Traders, brokers and clerks will use the workstations to relay real-time market information from the exchange floor to trading desks upstairs, and data backup will be managed by IBM's Tivoli software.
"The interesting part is not simply what this provides to the New York Stock Exchange, but what this means for the larger position in the market for Java," said Dave Cearley, an analyst at Meta Group. "This is not simply a statement of the scalability of IBM's proprietary technologies. It's also about showing the scalability and reliability of Java environments."
Burkhardt said more than 100 enhancements were made to IBM's Java J2EE platform in order to meet the exchange's more stringent business needs.
"All those enhancements that were required were plowed back into the standard platforms IBM provides," Cearley said.