Ensuring High Frequency Trading Performance with SevOne and Terilogy
“Up to now managing the performance and availability of low latency environments has been addressed using a variety of individual tools implemented and operated independently. Firms can now free up resources previously dedicated to these tools. Our aim is to integrate the esoteric island of latency instrumentation back into the mainstream of enterprise performance management.” - Henry Young,CEO of TS-Associates
A Compelling Problem
The rapid growth of high frequency and algorithmic trading across the financial markets in New York, London, Tokyo and Hong Kong is placing new demands on IT operations teams to provide and ensure the extreme levels of technical and business performance that is required. Speed is the most important differentiator in high frequency trading or HFT, making it critical to establish the lowest possible latency of the end-to-end trade flow, but with predictable and scalable performance. While conventional network level latency measurement tools have existed for a number of years, they have been primarily used in application testing centers and in isolated production environments. A new paradigm of performance instrumentation and management tools are required to keep pace with the demand for complete visibility and best execution across the entire trading cycle, from market indication to execution.
Integrating Latency Monitoring
Given the rapid evolution of the high frequency trading business, managing the performance and availability of these new low latency environments has been addressed using a variety of tools implemented and operated independently. Firms are often forced to dedicate additional and significant resources to monitoring, identifying and resolving any issues that may arise. Integration of the specialized low latency monitoring tools with standard network management systems and practices is therefore important, especially as these environments grow in scale and business importance. Collecting and reporting on low latency performance metrics along with the supporting HFT and network infrastructure is necessary to maintain a complete and immediate view of all trading operations, provide best execution services and proof, and reduce operations costs.
The SevOne network performance management solution monitors millions of IT device elements and flows to keep increasingly complex networks, servers and application infrastructures functioning at peak performance levels. SevOne is the industry leader in high frequency polling and IP SLA testing, capabilities that many leading financial services customers use today. And now, by integrating with TS-Associates TipOff®, a passive low latency monitoring appliance, IT operations teams and business managers can get complete and immediate visibility of the performance of their HFT environments using the same reporting consoles and workflows used to manage their network and servers.
Complete and Immediate Visibility
TipOff supports passive latency monitoring of market data and transaction flows. By decoding packet streams in real time through all layers from network up to application message content, TipOff can monitor both packet and message latency, accounting for retransmission latency in the reliability layer. A single multi-hop flow may comprise several different middleware stacks or protocols. TipOff supports flows that undergo transformations through order aggregation, trading engines and execution venues.
SevOne can be configured to connect to each TipOff appliance to gather summary latency metrics on transaction flows. These latency metrics are imported into the SevOne Performance Appliance Solution (SevOne PAS™) and tracked as individual objects. This enables SevOne to monitor critical HFT performance indicators like hop latency along with key performance indicators from the IT infrastructure such as link utilization, server or router CPU load, and internal application statistics. SevOne builds granular baselines of normal performance levels, and proactively monitors and raises alerts when observed values deviate from historical norms. Once alerted to a problem, a user can quickly troubleshoot the IT and trading infrastructures, since they have access to a holistic view in a single management solution.
About SevOne and Terilogy
Evaluating and choosing the best combination of a precision monitoring and performance management solution is a difficult task for Financial Services companies. Therefore, as a leading global provider of service assurance and nextgeneration network infrastructure solutions, Terilogy has partnered with SevOne and TS-Associates to integrate and deliver a comprehensive portfolio of best-of-breed network infrastructure, network performance management and precision instrumentation solutions and services across Asia Pacific. Terilogy has also established an Ultra Low Latency “Center of Excellence” in Tokyo, for demonstration and exploration of low latency monitoring technologies. The Center of Excellence showcases a comprehensive solution based on “Best of Breed” Precision Instrumentation, Network Performance Management and Service Level Assurance technologies.