The New York Stock Exchange (NYSE) has slashed the time it takes to execute a trade to five milliseconds from 105 milliseconds, following the implementation of its NYSE Super Display Book system (SDBK).
The new system can also generate order and cancellation acknowledgments in just two milliseconds. In 2007, orders on NYSE were executed in around 350 milliseconds.
Despite the reduction, NYSE still lags some rival platforms. The current capacity of BATS Exchange’s matching engine is 200,000 messages per second and round-trip latency is 400 microseconds.
SDBK replaces NYSE’s SuperDOT order delivery and processing system, which has been in operation since 1976, as well the Post Support System that routed orders to the exchange’s trading floor. Based on NYSE Arca’s trading engine, SDBK will provide “greater throughput, flexibility and scalability as well as lower operating costs”, according to NYSE, a wholly-owned subsidiary of global exchange group NYSE Euronext.
“Customers can now access our market with greater speed and assurance, and their orders will be delivered and executed more efficiently than ever,” said Louis Pastina, executive vice president, NYSE Operations. “Customers can employ the benefits of competitive speed and automation in addition to our longstanding value of high-touch price discovery on the only US exchange cash equities trading floor.”
Over the past 18 months, NYSE has replaced its order entry, order database and routing systems, market data systems and components of its post-trade system using technologies gained through recent mergers and acquisitions, such as NYSE Arca, Wombat and Euronext.
The exchange group said that transaction speeds would be further improved later this year when its NYSE Euronext’s Universal Trading Platform – already used in its European equities and fixed-income markets – will be rolled out to NYSE, NYSE Amex and NYSE Arca.