How Linux Mastered Wall Street

itwbennett writes "Linux has become a dominant player in finance thanks to its ability to pass messages very quickly, said Linux kernel contributor Christoph Lameter. 'The trading shops saw that the lowest-latency solutions would only be possible with Linux,' Lameter said. 'The older Unixes couldn't move as fast as Linux did.' One key attribute was the TCP/IP stack, the configuration of which determines how fast a message can be passed between two systems. Linux also offers financial firms the ability to modify the source code to further speed performance. 'It depends on how daring the exchange is,' he said, noting that NASDAQ uses a modified version of the Gentoo Linux distribution. Lameter will discuss how Linux became widely adopted by financial exchanges at the LinuxCon conference in Vancouver this week."

Comments

Customizable Kernel

[Warlord88]

As mentioned in the summary, linux allows the firms to modify the OS kernel to serve their purpose. For example, the performance of trading algorithms would considerably degrade if context switching is allowed. So you can modify the kernel so as to dedicate certain cores for the main algorithms to which the OS can pass a very limited number of signals.

I know for a fact that at least one bank employs this in their high frequency trading group and probably all of them do.

Re:thanks for whoring quants

[tunapez]

The problem is that measures of uncertainty using the bell curve simply disregard the possibility of sharp jumps or discontinuities and, therefore, have no meaning or consequence. Using them is like focusing on the grass and missing out on the (gigantic) trees. In fact, while the occasional and unpredictable large deviations are rare, they cannot be dismissed as âoeoutliersâ because, cumulatively, their impact in the long term is so dramatic.

The Godfather tried to warn them. Don't know if I'm pleased or saddened that he lived long enough to see his incredible tools turned into "weapons of financial destruction". [Emphasis mine]

Luckily, he will be spared the repeat performance. Nothing's changed, they're still "printing money" every day. [emphasis theirs]