NSE.IT slashes algo trading latency with eXtremeDB

Source: McObject

McObject, developer of innovative real-time database technology, announced that NSE.IT, the 100%-owned IT subsidiary of India's National Stock Exchange (NSE), the third largest stock exchange in the world (by volume), has integrated McObject's eXtremeDB In-Memory Database System (IMDS) to replace traditional relational database management system (RDBMS) software in performance-critical features of its algorithmic trading solution based on the NeatXS trading platform.

NSE.IT credits NeatXS's move to eXtremeDB with slashing order-processing latency to the sub-millisecond level and delivering ultra-low latency to achieve higher throughput.

NSE.IT's Algo Solution integrates eXtremeDB as the real-time database for NeatXS's risk management features, which protect Algo Solution users - typically brokerages, specialized trading firms, asset management firms and hedge funds - from a wide range of risks related to factors including order size, allocation of margins, gross and net exposure, options coverage, securities' mark-to-market value, and "fat fingers" keystroke errors.

Risk management is a process of measuring and analyzing risk and then strategizing to cope with it while attempting to manage returns. Not all risk can be controlled, but with a good strategy, the effect of risk can be managed and controlled for a portfolio. NSEIT's risk management approach combines required methodologies, technology and data in one solution to help clients make more informed financial decisions and effectively meet their business objectives.

In algorithmic and high-frequency trading, risk management is automated and requires analysis of orders after they are placed but before they are executed. "The NeatXS risk management function receives thousands of new data points per second. This flow has increased exponentially and is still growing, due in part to exchanges' expanding data broadcast services. Storing, filtering and organizing the data for complex analysis can become a bottleneck for algorithmic strategies that must 'get in and get out' quickly. For our most recent upgrade, we identified the risk management module's real-time database technology as an area where we could optimize the product and deliver greater value to users," said V.S. Kumar, NSE.IT's President - Americas.

In-memory database systems work with data entirely in main memory, eliminating disk and file I/O as well as caching. Inn contrast, these sources of overhead are "hard-wired" into RDBMSs that are designed to store data on disk. eXtremeDB supports SQL, but NSE.IT's engineers chose to use its faster, native interface consisting of C language functions. Finally, eXtremeDB utilizes in-process database architecture rather than client/server. By running entirely within the application process, eXtremeDB eliminates inter-process communication from the execution path.

"eXtremeDB has enabled us to reduce latency to the sub-millisecond level per order while implementing a complex risk and compliance system, successfully positioning our Algo Solution in an increasingly competitive marketplace," said Dr. Pareshnath Paul, Chief Delivery Officer at NSE.IT.

"Achieving ultra-low latency while leveraging the robust risk management framework has improved the value proposition of our Algo Solution to buy-side firms in the Asian, American and European markets," said V.S. Kumar, NSE.IT's President - Americas.

"The eXtremeDB IMDS has emerged as a key tool to purge latency from data-intensive, real-time software applications. In capital markets, shaving processing time can quite literally translate to increased profitability, making eXtremeDB a natural 'fit' for this application category. McObject is working increasingly with customers in the financial industry and is pleased with the success NSE.IT has achieved using our technology," said Chris Mureen, McObject's Chief Operating Officer. 

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