We would like to apologize to those who are inconvenienced by this data volume explosion.
Genesis considers the data issues our #1 priority. Without quotes, traders cannot trade. We understand this, and we are addressing the problem.
The general cause of quote data problems, street wide, has been a tremendous, exponential increase in quote data volume, due in large part to algorithmic strategies entering large amounts of quotes. Black boxes send out lots of limit orders and cancel them and again and again, etc. This has overloaded many systems, and many exchanges, ECNs as well as trading platforms, even NYSE itself, have been affected. Multiple regional exchanges like the ISE, CHSX, EDGX, and NSX go down daily, as their infrastructure simply cannot deal with this issue.
Just yesterday, NYSE couldnât send order cancel acknowledgements. Today, 1/15/2008, NASDAQ dropped connectivity to their primary data center to multiple connections. Today, BATS stopped quoting on NSX due to NSX issues. Today, NASDAQ declared self-help vs. CHSX. The data volume is creating a huge strain on technology, and the exchanges are not ready.
Genesis is working feverishly on solving this data volume issue.
Specifically, to address ARCA and Direct Edge:
- For ARCA, they send us data in unicast or TCP. TCP will ensure data delivery by making bit test. This has been good enough for a long time, but the data volume has recently gotten to the point where ARCA simply cannot send the data fast enough using unicast. That is why you are seeing continuously delayed ARCA quotes. Genesis is connecting directly to the ARCA unicast feed because we want to make sure that all data is delivered. Unfortunately, when we get delayed quotes from ARCA unicast, the traders also get delayed data. ARCA IT has put their effort into a new transmission method called multicast, and Genesis is currently working as quickly as possible to implement multicast on our side. We have finished programming and are testing it now. We expect to release it next week. Traders will see significant improvement in ARCA quote data.
Some info directly from ARCA, sent last month:
âIn early January [THIS IS 1/07] we were sending around 150 million messages per day. Yesterday we sent near 600 million. TCP is not a good way to deliver this data.â
â⦠even with all of our nodes we are seeing market data delay. When we launched multicast we expected client to migrate to it quickly. This migration would allow much more capacity on the TCP platform. The migration has not gone as planned.â
- For Direct Edge, the quote volume has also caused the same problem, on their side, street wide. Direct Edge IT is working to implement a re-architecture of their market data feed which they feel will alleviate latency issues. In the meanwhile, there is really nothing we can do with EDGE except advise traders to hide the EDGE book if quotes become crossed.
Genesis has and is investing over seven figures to upgrade our infrastructure (hardware, software, networking, LAN, WAN, etc.) and re-engineer our quote system to deal with the increased quote volume. Our new architecture will handle many, many times multiple of data volume and should last for many years to come. As an example, we have recently upgraded our NYSE data feed to transmit using our new proprietary technology that has alleviated NYSE data queuing delays significantly.
Traders trading thru internet are also more susceptible to the data volume explosion. Their ISP may not be able to pump so much data volume continuously. The ISP may cause some queuing.
Genesis is here for the long term. We are a self-clearing broker dealer, not just a software company. We have invested millions into our infrastructure, and we will continue in our mission to provide cost effective, technologically advanced solutions to the trading community for years to come.
We listen to our traders. We want to give the traders the best weapon: quote speed, order execution, price, and customer service.
Thank you.
Management
Genesis Securities, LLC.
