Today, Exegy launched its next generation ticker plant, purpose-built for processing options market data.
Traders Magazine spoke with Exegy CEO David Taylor to learn more.
For how long has this next generation ticker plant been under development, and what gap in the industry is it meant to fill?
This specific platform has been under development for a bit over two years. To set context, you can think about the Exegy Ticker Plant in the same way you think about the iPhone. Exegy Ticker Plant is to iPhone as this appliance platform is to the 14 Pro handset. In other words, it’s the next generation of hardware that we’re rolling out to the industry, and over its lifespan, it will get a continuous stream of firmware and software updates to improve functionality and performance.
This is the sixth appliance hardware platform for the Exegy Ticker Plant. We typically roll out a new one every three to five years. We monitor the technology roadmaps of the major semiconductor companies and decide when there is a compelling convergence of new multi-core chip sets and FPGA devices that we can integrate into our next generation appliance platform. That time is now.
This allows us to deliver an immediate performance enhancement to our existing clients. It also gives us the tools in the box in the form of additional computing and reconfigurable logic resource to further improve performance or add features to the product. Over a three- to five-year product lifespan, we can double capacity, and we can cut latency in half just by improving the way we process the data inside the box. These enhancements are delivered as a managed service and are a tangible expression of what we mean when we say that Exegy provides future-proof solutions.
How do you roll out these platforms?
Our comprehensive managed services includes appliance deployment and integration with our global monitoring and management infrastructure. When our teams complete the installation and verification services, our customers simply connect, verify, and carry on. Existing customers enjoy the benefits of backward-compatible APIs to make the upgrade seamless. We have large, long-tenured clients who serve as early adopters and are partners with us in ensuring the new appliance platforms are ready for production. These early adopters tend to be the highest-volume, lowest-latency consumers of market data. Other clients typically plan for appliance platform upgrades over the next 12 to 18 months.
How specifically will options trading firms benefit from this next generation ticker plant?
Doing nothing is not an option. As traders who are dialed into the US options market are well aware, the Options Price Reporting Authority (OPRA) is set to double the number of data streams it sends out as part of its consolidated tape feed. Their capacity guidance to feed recipients has gone up dramatically – they’re now saying that clients need to be ready for 120 million messages per second starting in October. Recipients need to be ready to consume that much information, or risk losing data, which brings adverse effects such as instability in the trading infrastructure, poor trading performance, as well as regulatory issues.
The immediate benefit for our clients is excess capacity and lower, more consistent latency when they upgrade their existing appliance platforms. There’s no change to anything else in their infrastructure, including code changes. They also position themselves for an exceptional customer experience going forward by positioning excess processing resources in their infrastructure to keep pace with increasing performance demands over time. For those market participants not already using an Exegy Ticker Plant, this solution can process the OPRA feed on a single 2U server, which could result in a 15-20x reduction in their datacenter footprint.
How is the next-gen ticker plant differentiated from other offerings in the marketplace?
The Exegy Ticker Plant continues to be the only product in the market that hits the goldilocks balance of high-capacity, maximum efficiency, consistent low latency, and a simple and elegant user experience. It is powered by our team’s expertise in the application of the technology to capital markets, our Intellectual Property, and the managed service deployment model that allows us to engage as a mission-critical partner with our clients. This unique blend of performance, functionality, and service delivers reliability and lower costs to our clients’ businesses, and we have not seen an equivalent competitor emerge in the marketplace.
What other asset classes is this relevant for?
We are launching this new generation appliance platform to focus initially on the US options use case, which is a high capacity market. But it is also going to be deployed imminently for US equities and commodities. And we will continue to roll through the 200+ markets and asset classes that the Exegy Ticker Plant supports over the next six months.
What might the next next-gen ticker plant look like?
Part of that will be driven by the semiconductor roadmaps of the underlying technology providers. Right now the semiconductor industry continues to innovate in terms of the size of transistors, so you can pack more transistors into a given chip. But the clock speed of the chips, and therefore the speed at which software can run, has leveled off.
They are starting to put other purpose-built circuits inside the chips, that might enable data science or AI applications, for example. So what we would expect to see over the next three to five years when we release the next appliance platform is more types of processing resources within that box, to do things like AI or analytics in real time. We already have a real-time predictive AI-driven suite of signals that runs in the Exegy Ticker Plant, called Signum. We have clients using that today for enhanced execution, algos, and order types. The expansion of Signum use cases is a primary input into the architecture and computing resources for our market data appliance platforms.
