A startup supplier says it can, in effect, guarantee the processing of a new piece of market data in under 1 millionth of a second.
If so, the speed would undercut processing times by existing systems by four or five millionths.
The firm, Burstream, said it can process a new piece of data in 600 billionths of a second, regardless of how many millions of pieces of data stock markets in the United States are generating.
The transmission of market data messages hit a new peak of 6.1 million messages a second on September 12, according to MarketDataPeaks.com, operated by Exegy. Exegy is a supplier of market data appliances.
Burstream Monday is announcing that its NanoSpeed Market Data Mesh service is being installed at the Nasdaq OMX market center in Carteret, N.J. That is in a data facility owned and managed by Verizon Communications.
Burstream’s technology relies on a type of microchip known as field programmable gate arrays, which can handle thousands of calculations in parallel. That means that even if the processing is slower than in a dedicated processor, the volume of finished calculations in a given space of time is much higher, according to CEO Paul Barringer. And it handles bursts of market traffic, without slowing down.
Nasdaq members get “a substantial trading advantage – ten times faster than hardware-accelerated approaches,” states Paul Barringer, CEO of Burstream. “Our NanoSpeed MeshTM gives proprietary trading firms the ability to quickly and dramatically increase the performance of their latency-sensitive algorithms.’’
The Nanospeed system also streamlines processing by normalizing all incoming market data, so that it can be managed in one steady stream. The data also is kept in active memory, so processing can be instant.
Beyond that, a trading firm’s entire order book at a given moment is held in active memory, so it can be acted on immediately.
In addition, Burstream acts almost as a co-location provider. Burstream will maintain trading servers in the Carteret facility, near Nasdaq’s order matching engines.
That means Burstream customers can just load their algorithms onto its server and be ready to go. The market data connections, at the nanosecond speeds, are already in place.
Burstream also tries to streamline movement of data between stock, commodity and derivatives markets. Its Carteret installation is linked by Spread Networks’ through-the-mountains direct fiber connections to a markets data center at 350 E. Cermak Road in downtown Chicago.
“Making the jump from microseconds to nanoseconds will ratchet up the competition and could be a game changer for latency-sensitive strategies and certain trading houses,’’ said Larry Tabb, founder of the Tabb Group.
-- This article first appeared on Securities Technology Monitor.