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Solarflare, LDA and Penguin Slash "tick-to-trade" Latency to 96 Nanoseconds

Traders Magazine Online News, October 30, 2017

John D'Antona Jr.

Solarflare, a provider of trading servers; LDA Technologies, an FPGA product development firm; and Penguin Computing, a provider of custom and turnkey high performance computing, enterprise datacenter and cloud solutions; announced record-breaking tick-to-trade networking performance for a server configuration they have nick-named the Ultimate Trading Machine.

Decreasing tick-to-trade latency is essential in electronic trading because it means improving the queue position of trades, which increases the probability of executing a trade. The Ultimate Trading Machine configured by LDA, Penguin, Solarflare and XILINX achieved 98-nanosecond tick-to-trade latency of network I/O in STAC-T0™ benchmark testing.*

STAC-T0 is a new proposed benchmark from the Securities Technology Analysis Center (STAC®), an organization that provides technology research and testing tools based on community-source standards. Peter Lankford, STAC Director, said: “STAC-T0 is the purest measure of how fast a platform can get critical information into and out of an application via UDP and TCP over Ethernet. STAC-T0 measures the time between transmission of simulated UDP market data to the system and receipt of simulated TCP orders from it, without the system performing any trading logic or market-specific protocol handling. When receiving 68-byte Ethernet frames at 1 gigabit per second, the solution tested here had a maximum Actionable Latency of 98 nanoseconds, which is how long it takes the solution to start transmitting an order after all the algorithmically relevant portions of an inbound packet have been transmitted to the solution. This value incorporates a measurement uncertainty of +/- 2 nanoseconds.”

The server used for this benchmark testing consists of a Penguin Computing Relion® XE1112 server with dual Intel® Xeon® Scalable (Skylake) processors, XtremeScale 8722 software-defined NICs from Solarflare, and Xilinx Kintex® UltraScale™ FPGAs running the LDA Lightspeed TCP™ core. Penguin Computing Relion XE1112 servers, configured as Ultimate Trading Machines, can be custom ordered today.

Chicago based Rival Systems has been using Solarflare NICs since 2015 to give its clients the performance they need to compete in the market.

“Everyone wants to be at the top of the queue in a first-in, first-out matching engine, and traders can get to the top by being faster and smarter than the competition,” said Rob D’Arco, CEO of Rival Systems. “Anytime we can provide our clients a faster tick-to-trade time; they’re trading with a competitive advantage.”

According to Ahmet Houssein, Vice President of Marketing at Solarflare, “The time interval between receiving a market tick showing an opportunity to an algorithm, and sending the buy/sell order is total tick-to-trade latency. The latency of network input-output is a crucial factor in total tick-to-trade latency. World record tick-to-trade network I/O performance—validated by the STAC-T0 benchmark—is made possible by technologies inside and outside Solarflare software defined NICs.”

“Our customers in the high-frequency trading industry have been anxiously awaiting the arrival of servers with Intel® Scalable processors,” said Jussi Kukkonen, VP, Advanced Solutions Group, Penguin Computing. “The Ultimate Trading Machine project is proof that Penguin Computing continues to pioneer the delivery of new generations of solutions with leading-edge trading performance.”

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