HFT Spawns Networking Solutions

Terry Flanagan

Escalation of high-frequency trading challenges IT and network operations.

The rapid growth of high frequency and algorithmic trading across financial markets has been placing new demands on IT operations teams to provide and ensure extreme levels of technical and business performance.

In particular, information technology operations teams and business managers require visibility into the performance of high frequency trading (HFT) environments using the same reporting consoles and workflows used to manage network and servers.

That’s spawning advanced monitoring capabilities that span the trading floor and corporate network management systems.

“With the rapid evolution of the high frequency trading (HFT) business, managing the performance and availability of these new low-latency environments has been addressed ad hoc, using a variety of tools implemented and operated independently,” Michael Phelan, president and CEO of SevOne, told Markets Media.

Firms are often forced to dedicate additional and significant resources to monitoring, identifying and resolving any issues that may arise.

“Integration of specialized low latency monitoring tools with standard network management systems and practices is therefore important, especially as these environments grow in scale and business importance,” Phelan said.

SevOne, a provider of network performance management solutions, has configured its system to connect to TipOff appliances from TS-Associates to gather and monitor summary latency metrics on transaction flows; TS-Associates is a supplier of precision instrumentation solutions for latency-sensitive trading systems.

This allows users to monitor critical HFT performance indicators such as hop latency, build baselines of normal utilization levels, and proactively monitor and raise alerts when utilization deviates from historical norms. Once alerted, a user can quickly troubleshoot the network and trading infrastructure.

“Collecting and reporting on low latency performance metrics along with the supporting HFT and network infrastructure provides a complete and immediate view of all trading operations, provides best execution services and proof, and reduces operations costs,” Phelan said.

The SevOne network performance management solution monitors millions of IT device elements and flows to keep increasingly complex networks, servers and application infrastructures functioning at peak performance levels, Phelan said.

SevOne ‘s services include high frequency polling and IP SLA testing, capabilities that many of its financial services customers use today, including Credit Suisse, Dow Jones, Nomura, Knight Capital, Thomson Reuters, UBS, and Tora Trading.

Terilogy, which provides network infrastructure solutions and technologies in Japan, has partnered with SevOne and TS-Associates to deliver this HTF performance management solution and services across Asia Pacific.  Terilogy has also established an ultra low-latency center of excellence in Tokyo, for demonstration and exploration of low latency monitoring technologies.

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