Eurex Completes Trading System Migration

Terry Flanagan

Eurex Exchange has completed its migration to Deutsche Börse Group’s global trading architecture.

The fixed-income derivatives segment, including highly liquid Euro-Bund, Euro-Bobl and Euro-Schatz futures, was the last to migrate from the previously used system.

The new platform meets the needs of Eurex Exchange participants in terms of enhanced performance, efficiency and capacity, more connection options and improved functionality, while maintaining the high stability and availability that traders are used to.

“We thank our participants for their constructive cooperation in the stepwise smooth migration,” said Jürg Spillmann, deputy CEO at Eurex, in a statement. “Our new world-class system gives participants access to our liquid and global markets with well-known competitive advantages in terms of enhanced functionality, stability, latency and performance. With the final migration step, Eurex Group once again provides innovative IT solutions on a global scale.”

The technology has been operational since April 2011 by the International Securities Exchange (ISE), the leading U.S. options venue and Eurex Exchange’s partner exchange.

When it comes to latency, major improvements are already measurable: the round-trip time for the fastest futures order was around one millisecond in the old system; now it is just 150 microseconds approximately. The average latency for the system as a whole has been reduced by more than 50 percent for futures and more than 90 percent for options.

“The new matching engine brings capacity without compromising on the importance of safety in a trading environment. This combined will enable market makers like Optiver to continue posting tighter spreads for end investors to trade,” said Hans Pieterse, head of market structure Europe at Optiver.

The new trading architecture consists of partitions, each of which is in charge of matching trades and producing market data for a subset of products.

Each partition, called a New Trading Architecture (NTA) partition is distributed over two rooms in an Equinix data center.
“The high-frequency Eurex Enhanced Transaction Interface gateways in the Equinix facility provide the fastest access to the new trading architecture,” said Wolfgang Eholzer, head of trading system design at Eurex, in a presentation. “There will be 16 such gateways in the Equinix data center shared by all trading participants of Eurex Exchange.”

Eurex Exchange expects that after the migration has been completed the total market data volume published by the NTA to be 2-3 time larger than with the old trading system.

The philosophy embedded within the Eurex NTA system is that high-frequency trading is a natural reflection of competition between market participants using the advances in computer technology, and is a technology that enables for the implementation of a wide range of trading strategies.

Regulators have acknowledged that HFT is here to stay, and that it should be brought into the fold by adapting new trading systems that ensure fairness to all market participants.

The migration began in December 2012. A first software release will follow in July 2013, which will reduce latency further. A further release is planned for the end of 2013, which will introduce new functionalities for new product types and a new market data interface for benchmark futures – the Eurex Enhanced Order Book Interface.

The global trading architecture offers considerably more flexibility, which will also enable faster time-to-market implementation in the future. The high-performing messaging architecture provides lower latency and faster communication and is based on extremely reliable database systems.

Eurex Exchange participants also benefit from improved functionality including a comprehensive spread matrix, which offers 190 calendar spreads for EURIBOR futures and user-defined options strategies.

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