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London Stock Exchange Finishes Switch To Linux
DMandPenfold writes "The London Stock Exchange has successfully set into live trading a new matching engine based on Novell SUSE Linux technology, following successful last-step setup procedures on Saturday. The move has been billed as one of the LSE's most significant technological developments since the increasing prevalence of electronic trading led to the closure of the traditional exchange floor in 1986. LSE chief executive Xavier Rolet has insisted that the exchange, once a monopoly, will deliver record speed and stable trading in order to fight back against the fast erosion of its dominant marketshare by specialist electronic rivals."
based on Novell SUSE Linux technology
Should it be Attachmate (err... Microsoft...?) Linux Technology already?
Questions raise, answers kill. Raise questions to stay alive.
Does this mean the prompt will be a GBP (£) sign instead of a dollar ($) ?
the exchange, once a monopoly, will deliver record speed and stable trading in order to fight back against the fast erosion of its dominant marketshare by specialist electronic rivals
The issue facing markets isn't that. It's algorithmic trading:
https://secure.wikimedia.org/wikipedia/en/wiki/Algorithmic_trading#Issues_and_developments
https://secure.wikimedia.org/wikipedia/en/wiki/2010_Flash_Crash
Please help metamoderate.
This likely means that the Toronto Stock exchange will soon be using Linux as well, if they aren't already.
I know it's not my most sophisticated comment, but I like open source so I am happy :)
Never antropomorphize computers, they do not like that
And so ends one more of an increasingly long line of Accenture / MSFT snafus.
Novell SUSE Linux is pretty good as long as you think before you do stuff. Its easier to get into dependency hell than with RedHat or Debian/Ubuntu but other than that its very stable and nice. Personally i prefer Debian but i do manage a couple of SUSE machines taking serious loads day and night on a slew of different serivces and they have been working flawlessly without any problems at all.
HTTP/1.1 400
If you are an automated trader then you do need any speed you can get. If you aren't - well, you probably don't have any business being on the stock exchange any more. A bit more or less speed is not going to make any difference; you're hopelessly outgunned either way.
Trust the Computer. The Computer is your friend.
Maybe I'm not cynical enough, but all the low-latency trading and algorithmic competition in the world isn't really going to change the fact that I can sit here with delayed stock quotes, look at a company's financial statements, look at the company's P/E ratio and potential for growth and put a bid in at a price of my choosing.
There is exactly one problem: greedy people
It sucks money out of the stock market.
Fans of it will say it provides 'increased liquidity'.
Me, I say, it sucks monkey out of the stock market. If it didn't the HFT people wouldn't bother doing it. The money comes from somewhere, and that somewhere is other investors. If it *doesn't* come from somewhere then creating it means there's more money and it comes from everyone via inflation.
That's my take. May be wrong, may be dense, but that's my take. Me, I'd scale back the whole thing massively because I still haven't had anyone explain adequately to me how, after they've gone public, the company's stock market valuation matters (to the company) for anything at all, except for perhaps their ability to rack up debt.
Wasn't this the MS get the fact showcase as to how much better ms.net and sql server were compared to linux? Before the system came crashing down and latency became an issue?
"increased liquidity" has a cost.
If you want to buy now, or sell now, instead of spending a few days shopping for a willing partner on the other side of the trade you won't get as good of a price. But you also have the reduced risk of not spending a few days trying to unload your stock.
The one thing that you will notice is that with the high frequency traders the spread is now very small, but the volitility is much higher, so in some ways this is a reaction to discount brokerages and the decimalization of stock prices, as the fees are not in the spread but in the volatility. I don't know which is more profitable to the house, but the reduced spread and the greatly reduced commissions had to be made up for someway. Banks are more profitable now, but there are many fewer banks, so direct comparisons with thirty years ago are not possible without correcting for industry consolidation.
An example of the cost of liquidity is that, while exchanges are liquid, someone selling five to ten percent of a company in the open market in a few minutes can easily erase more than half of the companies market capitalization. But the stock is sold and the books are closed.
One difference between specialists and high frequency traders is that specialists have to be the buyer and seller of last resort, while HFT's have no obligation to make a losing trade.
I have not looked at the math behind technical trading recently, but in the nineties there were several papers published that suggested that technical trends could only see about 15 minutes into the future, and the predictive value more than five minutes into the future was murky, but not useless.
As far as your question of how a companies market capitalization matters to the company, it depends on the company. Some companies carry a large number of authorized shares on the balance sheet, but do have not issued them. The company can give bonuses as stock options which if the options are deep in the money, the investors are essentially paying a substantial percentage of employee compensation, instead of the company paying it. A high market capitalization does not guarantee that people will loan you money, but it does tend to lower your interest rate, and allow you to issue really long term debt. (Disney and Coke issued 100 year bonds, Canadian Pacific issued 1000 year bonds.) One other thing that companies can do with an over inflated market cap is buy things with the stock, see aol buying time warner as a famous example of that. I am sure that there are uses that I am forgetting at the moment. But I hope that is somewhat illuminating.
Work bio at MMWD
I still haven't had anyone explain adequately to me how, after they've gone public, the company's stock market valuation matters (to the company) for anything at all, except for perhaps their ability to rack up debt.
If the company's stock is highly valued they can finance growth by selling shares. Otherwise they would have to "rack up debt" in order to grow.
London Stock Exchange investigating potential system problem on closing auction http://www.computerworlduk.com/news/it-business/3261177/london-stock-exchange-investigating-potential-system-problem-on-closing-auction/ The London Stock Exchange has said it is investigating an issue on its main cash market, which yesterday implemented a new matching engine based on Linux technology. The LSE declined to give details on what had happened until the investigation was complete, and it is not known whether the new system was responsible. The system, written in C++ language on Novell SUSE Linux-based datacentres, replaced a Microsoft .Net-based system that ran on Windows Server and SQL Server....
http://www.computerworlduk.com/news/it-business/3261177/london-stock-exchange-investigating-potential-system-problem-on-closing-auction/
the next thing they install is WINE.