IntercontinentalExchange (NYSE: ICE) today announced the results of a year-long technology development effort to enhance the performance of its electronic platform for commodities trading.
ICE is the leading electronic energy marketplace and serves a diverse range of participants in the global futures and over-the-counter (OTC) marketplace. Today approximately 50% of the world's crude futures contracts are traded on the ICE platform.
ICE develops and maintains its trading platform and the global infrastructure that supports its electronic markets. The platform is accessible via ICE's global connection hub network, ICE's fully-managed wide- area-network private line connections directly into the exchange, and the Internet.
During the initiative to increase the speed and scale of its electronic trading platform, ICE implemented new matching engines for the trading of futures and cleared OTC contracts, re-architected its internal messaging systems, upgraded matching-engine servers, and tuned each component of the platform to maximize efficiency in execution and processing. ICE also improved its APIs to reduce customer bandwidth requirements, upgraded its network hardware, and re-engineered its network.
In addition, ICE deployed an industry-standard FIX API (Financial Information Exchange - Application Programming Interface) to complement its longstanding Java API. Approximately 20 firms, including many well known statistical-arbitrage and algorithmic trading funds have, or are in the process of, completing connectivity of their customized trading applications to the newly issued FIX API.
To serve its global customer base, ICE opened telecommunications hubs in Chicago, London and Singapore in the past year. These telecommunication hubs are designed to facilitate access and reduce connectivity costs to ICE's electronic trading platform.
"These transformational changes to the ICE platform are the result of our continuing commitment to innovation in the rapidly growing global energy markets," said Charles A. Vice, ICE's President and Chief Operating Officer. "The year-long platform development program positions the ICE platform among the leading derivatives platforms today. We were early proponents of the speed and transparency that electronic trading brings to the energy markets, and we will continue to seek advances in technology to serve the energy marketplace."
"As a participant in ICE's markets, we have benefited from the advances in the ICE platform," said Ethan Kahn from Quiet Light Trading. "The platform is now faster and more flexible than ever."
As a result of the recent enhancements to the ICE trading platform, the performance of the platform has improved as follows:
- The ICE platform today is 600% faster than at the beginning of 2006, and over 1700% faster than the same time last year, while handling more than ten times the message volume compared to last year. The average round-trip transaction time of approximately 31 milliseconds (ms) is on par with the fastest electronic platforms in the industry. These statistics apply to the round-trip time within the ICE data center from the moment an order reaches the data center, is processed in the matching engine, and sent out of the data center.
- Average round-trip transaction times have continually improved from 586 ms in May 2005 to 216 ms in December 2005; and from 183 ms in April 2006 to 31 ms at the end of May 2006.
- Unlike most futures exchanges, the ICE trading platform achieves its high-speed results while also managing pre-trade counterparty and clearing credit limits. This functionality provides traders and clearing firms with high-quality risk-management at the server level in the highly volatile energy markets.
In April 2005, ICE's futures business segment, ICE Futures, completed its transition to electronic trading, placing significantly increased demands on the platform. Since the transition to electronic trading, ICE Futures has achieved record volume. Electronic trading in the futures markets on the platform has grown from an average of 33,296 contracts per day just prior to the electronic transition last year, to 338,792 contracts per day in May 2006, representing a 577% increase in electronically traded futures volume.
The ICE platform is the only derivatives platform to host integrated futures and over-the-counter markets, including trade execution, credit management, trade capture and confirmation. The platform allows for access via multiple front ends including WebICE - the industry's leading web-based front end for energy trading. The ICE platform is also accessible via a dozen independent software vendors (ISVs), and is on the desktops of thousands of energy market participants in 41 jurisdictions around the world virtually around the clock each day of the week.