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Monday, December 7, 2015

POWER8, Linux, and CAPI provide micro-second information processing to Algo-Logic’s Tick-to-Trade (T2T) clients

By Rich Ptak and Bill Moran


Rapid processing of data improves decision-making in trading, research, and operations, benefitting enterprises and consumers. Computer servers accelerated with Field Programmable Gate Arrays[1] (FPGAs) operate at the greatest speeds to collect, analyze, and act on data. As data volumes sky rocket, processing speed becomes critically important.

Algo-Logic[2] leverages the speed of FPGAs to achieve the lowest possible trading latency. Their clients have access to data in 1.5 millionths of a second, enabling them to make better trades. Algo-Logic Systems’ CAPI-enabled Order Book is a part of a complete Tick-to-Trade (T2T) System[3] for market makers, hedge funds, and latency-sensitive trading firms. The exchange data feed is instantly processed by an FPGA. The results go to the shared memory of an IBM POWER8 server equipped with the IBM CAPI[4] card and specialized FPGA technology. Then, in less than 1.5 microseconds, it updates an order book of transactions (buy/sell/quantity).

Stock trading generates an enormous data flow about the price and number of shares available. Regulated exchanges, such as NASDAQ, provide a real-time feed of market data to trading systems so that humans and automated trading systems can place competitive bids to buy and sell equities.  By monitoring level 3 tick data and generating a level 2 order book, traders[5] can precisely track the number of shares available at each price level. Firms using Algo-Logic’s CAPI-enabled Order Book benefit from the split-second differences in understanding and interpreting the data[6] from the stock exchange feed.

Algo-Logic released their CAPI-enabled Order Book in March 2015. Multiple customers now use it in projects that include accelerated network processing of protocol parsing, financial surveillance systems, algorithmic trading, etc. with many proof-of-concept projects underway.

Algo-Logic found success with Linux, POWER8, and CAPI. We expect to write more about, Algo-Logic and other OpenPOWER Foundation[7] partners as they continue to develop solutions and POWER8-Linux systems demonstrate their ability to handle big data at the speeds developers, architects, and users need.




[2] Located in Silicon Valley; see: http://algo-logic.com
[3] See http://algo-logic.com/ticktotrade, also see:  “CAPI Enabled Order Book Running on IBM® POWER8™ Server” at: http://algo-logic.com/CAPIorderbook
[5] We oversimplify stock market operations for clarity. For more details visit the footnotes.
[6]  This is  High Frequency Trading (HFT), for information, see: https://en.wikipedia.org/wiki/High-frequency_trading