Redline delivers reliable ultra-low latency for financial markets firms

With powerful and efficient IBM System x servers

Published on 23-Jul-2013

"IBM has enormous expertise in tuning systems for low latency, and offers support in financial centers worldwide." - Lee Fisher, VP, Technical Marketing, Redline Trading Solutions

Customer:
Redline

Industry:
Financial Markets

Deployment country:
United States

Solution:
Connectivity - High availability, High Availability

Overview

Redline Trading Solutions (Redline) creates ultra-low latency market data and order execution systems that enable firms to excel in today’s equities, options, futures and FX markets. Founded by a team rooted in mission-critical high-performance computing, Redline helps firms achieve faster, more deterministic trading performance while lowering development and operational costs.

Business need:
With a huge amount of money at stake, financial markets firms are in a constant arms race to minimize end-to-end latency and seize fleeting market opportunities ahead of the competition.

Solution:
With Redline solutions on 32-core compact IBM® System x® 3750 M4 servers, based on the Intel® Xeon® processor E5-4600 family, firms can reliably achieve ultra-low latency and predictable performance.

Benefits:
Extreme low latency and deterministic performance enable firms to spot and act on profitable trading opportunities faster than competitors; expertly pre-integrated IBM hardware minimizes tuning effort.

Case Study

Redline Trading Solutions (Redline) creates ultra-low latency market data and order execution systems that enable firms to excel in today’s equities, options, futures and FX markets. Founded by a team rooted in mission-critical high-performance computing, Redline helps firms achieve faster, more deterministic trading performance while lowering development and operational costs.

For firms that rely on high-frequency trading, smart order routing and algorithmic trading, time-to-market drives profitable trading. Profitability can come down to a matter of microseconds (µs), so market players are in a constant arms race to cut end-to-end latency and seize fleeting opportunities ahead of competitors. This means cutting the time to receive market data, process it, determine trades, perform risk checks and submit orders.

Lee Fisher, VP, Technical Marketing at Redline, comments: “We optimize our code for multi-core Intel Xeon processors to achieve ultra-low latency. As the number of cores per socket grows, we can execute more market data feeds and application threads in a single server, eliminating box-to-box hops that add latency. Using higher core-counts to reduce the number of servers also cuts capital costs, operational costs, and hosting fees at co-location sites.”

Extreme performance, industry-standard hardware
Rather than requiring specialty FPGA hardware to achieve low latency, Redline’s software architecture is optimized for industry-standard multi-core processors to deliver extreme throughput and low latency. With platforms based on the Intel Xeon processor E5-4600 product family, clients can deploy their entire trading system on 32 cores in a single 2U IBM System x3750 M4 server.

“Intel’s rapid progression in core-count per socket is great news for firms who seek ultra-low latency in the smallest possible physical package,” says Fisher. “With servers like the IBM x3750 M4, they can pack more processing into rented co-located rackspace, reducing costs and latency.”

He adds, “Our strong partnership with IBM creates benefits for our clients. First, IBM offers factory-integrated network adapters from leading low-latency vendors such as Mellanox and Solarflare, under IBM part numbers. Second, IBM has long-standing expertise in tuning systems for low latency. Finally, IBM offers global support in financial centers worldwide.”

Redline tailors its software to selected high-performance network adapters, enabling it to pull market messages at high speed from the wire directly into memory; IBM offers these supported adapters as pre-integrated options within the System x3750 M4. Depending on the balance between the number of market data feeds subscribed to, the number of network adapters to insert and the number of cores required to run the trading application, Redline clients may also deploy on smaller two-socket (16-core), 1U IBM servers such as the System x3550 M4 or the 2U IBM System x3650 M4.

Maintaining predictable low latency
Redline is a market leader in cutting latency to the lowest achievable levels. Its InRush 3 Accelerated Ticker Plant product, which connects data feeds from exchanges to client trading applications, offers average latency below 1.2 µs. The Redline Execution Gateway forms and tracks orders, with an average latency as low as 3.0 µs, and its Pre-Trade Risk Engine enables firms to handle SEC Rule 15c3-5-compliant pre-trade risk checks with average latency of less than 1.0 µs.

These latency figures translate into first-mover advantage: firms can process market information, determine trades and execute their orders ahead of their competitors. As firms look to trim every possible microsecond out of their end-to-end cycles, stretching the window of opportunity for profitable trading, even minor variances in server configuration and tuning can have a negative impact.

To help financial markets clients benefit from best practices in deploying leading-edge technologies, tuning and configuring their systems, and benchmarking industry-standard financial test suites such as STAC, IBM has established the Wall Street Center of Excellence, a global initiative which focuses on low latency and high performance technologies.

Fisher adds, “We test our software extensively on IBM System x, configured according to guidance from the IBM Wall Street Center of Excellence. Our IBM clients can also configure their servers in the same recommended way to achieve the expected performance. In our experience, IBM System x servers deliver predictable high throughput and low latency based on their high-performance design, build-quality, and integrated network adapters.”

Scaling performance with more cores
As Intel continues to increase the number of cores per socket, Redline can further reduce latency for its clients thanks to the scalable architecture.

“We believe our multi-core design delivers better real-world, end-to-end, tick-to-trade performance than specialty FPGA hardware,” says Fisher. “With each new processor generation, we can handle higher volumes in a single server footprint, eliminating the latency of server-to-server hops. This also potentially removes the need for complex and costly high-speed server-to-server interconnects and esoteric coding.”

Market data rates continue to increase as exchanges make throughput and networking improvements, resulting in an order of magnitude increase in quote burst rates. While traditional IT provisioning may look askance at idle cores on servers, the standby capacity provided by a 32-core system can ensure that Redline’s mission-critical trading system doesn’t fall behind when rates spike.

“The IBM System x3750 M4 continues to be one of the servers we recommend to clients, based on the strength of its performance and also its reliability, compactness, efficiency and build-quality,” concludes Fisher. “These qualities mean that our clients can be confident of getting the expected performance out of their mission-critical trading systems at all times.”

For more information

Contact your IBM sales representative or IBM Business Partner, or visit us at: ibm.com/systems/x

For more information on the IBM Wall Street Center of Excellence, or to arrange a visit, please visit: ibm.com/systems/services/briefingcenter/wscoe/

To learn more about Redline, please visit: www.redlinetrading.com

Products and services used

IBM products and services that were used in this case study.

Hardware:
System x, System x: System x3750 M4

Legal Information

© Copyright IBM Corporation 2013 IBM Corporation Systems and Technology Group Route 100 Somers, NY 10589 Produced in the United States of America July 2013 IBM, the IBM logo, ibm.com, and System x are trademarks of International Business Machines Corp., registered in many jurisdictions worldwide. Other product and service names might be trademarks of IBM or other companies. A current list of IBM trademarks is available on the web at “Copyright and trademark information” at ibm.com/legal/copytrade.shtml Intel, the Intel logo, Xeon and Xeon Inside are trademarks of Intel Corporation or its subsidiaries in the U.S. and other countries. This document is current as of the initial date of publication and may be changed by IBM at any time. Not all offerings are available in every country in which IBM operates. The client examples cited are presented for illustrative purposes only. Actual performance results may vary depending on specific configurations and operating conditions. It is the user’s responsibility to evaluate and verify the operation of any other products or programs with IBM products and programs. THE INFORMATION IN THIS DOCUMENT IS PROVIDED “AS IS” WITHOUT ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND ANY WARRANTY OR CONDITION OF NON-INFRINGEMENT. IBM products are warranted according to the terms and conditions of the agreements under which they are provided. The client is responsible for ensuring compliance with laws and regulations applicable to it. IBM does not provide legal advice or represent or warrant that its services or products will ensure that the client is in compliance with any law or regulation.