Fox River Financial Resources electronically trades equities, options, and futures. Its clients are among the top tier of very large institutional investors. Fox River promises clients trade executions at a set price that is better than they can obtain themselves in the market. By executing at a price that beats the promise price, Fox River increases profit from the trade.
As such, trading volume is high at Fox River, with thousands of trades occurring every day. How does it do it?
Performance and speed
As the market moves, investors race to analyze the situation and execute trades. Performance and speed are critical. Data is gathered and analyzed to determine patterns and predict future market activity and pricing. The value of the analysis is only realized when trade transactions are executed, so Fox River has developed proprietary software tools to rapidly gather and analyze market data and execute trades.
Fox River’s ability to trade competitively depends on this analysis. It has to analyse market data very quickly, then rapidly execute financial trades. To do this, it has 50 highly-skilled staff that depend on the software tools and underlying technology to understand the market and predict and execute on optimal trade positions.
The trading battleground and the weapon
The computing environment at Fox River is similar to those found in high-performance scientific environments. Their software uses an Oracle database running on a Linux platform powered by the fastest CPUs and servers available. The volume of data and intensity of analysis at Fox River is such that servers outnumber people many times over. The company maintains in excess of 20 terabytes of data and uses both network-attached and SAN-attached storage.
“Technology is used as a weapon,” said James Moskalik, Director of Technology Services at Fox River Financial Resources. “We are pitting our brain and our technology against our competitors. In this business, you really do live and die by how good your technology is. Milliseconds make a difference here.”
Time is, literally, money. Seconds mean dollars, hundreds, even thousands, perhaps tens of thousands of dollars.
Fast database, fast servers, but disk-bound
Because technology and speed are at the core of its competitive advantage, Fox River is constantly looking to improve its ability to rapidly analyze data and execute trades. Even with their meticulously-tuned databases and the fastest CPUs available deployed, Fox River was still anxious to improve performance.
“Our systems weren’t doing as well as they could, so we thought about what that was costing us and decided to see how we could improve,” Moskalik said.
Fox River already had a SAN and high-end Fibre Channel arrays in place, so it was familiar with the capabilities and limitations of the monolithic RAID systems. They were the constraining factor. Even the fastest hard disk drives have peak performance access times of 5 milliseconds. If that could be reduced then Fox River’s 50 staff would get the edge they needed. The company decided to look at solid state disk (SSD) to reduce data access latency and so improve overall performance.
It checked potential SSD suppliers and alighted on Texas Memory Systems as its preferred vendor. The TMS RamSan-400 delivers 400,000 I/Os per second, has 3,000 Megabytes per second of bandwidth with latency of less than 15 microseconds (compared to the hard drive’s 5 milliseconds).
They thought that the RamSan was very well engineered and didn’t cut any corners on manageability, reliability and availability. Fox River was also happy with TMS’ fit as a supplier to Fox River.
“Manageability is really important to us,” said Mr. Moskalik. “The RamSan is a much simpler, streamlined, easy-to-deal-with system, as compared to large traditional Fibre Channel arrays.”
Fox River installed a RamSan-400 solid state disk to accelerate its option tick data acquisition application. It was also used with the Oracle database to store hot tables and transaction logs. It fit seamlessly into the existing SAN environment and augmented the company’s existing storage infrastructure investment. Data that needs to be accessed fastest of all is stored on the RamSan, and the existing storage arrays are used to store static data that is not required for lightning-speed access.
SSD-supplied data arrives at lightning speed
“The RamSan has greatly improved our transactional ability, so we can deal with more customers and a lot more transactions,” Moskalik said. “For example, one of our batch processes went from over 3 hours to under 20 minutes when we moved to the RamSan.”
“The RamSan certainly lived up to its performance claims,” Moskalik said. “It is very cost effective in terms of performance to dollars spent. We are getting what we hoped for out of it and we’d definitely consider expanding in the future. It is a good investment.”
The performance improvements have enabled Fox River to improve its server CPU utilization and dramatically reduce Oracle tuning efforts. Also, without the RamSan, it wouldn’t be possible to capture rapidly incoming option tick data. Overall, Fox River has gained significant competitive edge.