"Suspicious" Problems with London Stock Exchange's New Trading System

The drama at the intersection of Big Data and Big Money continues. The hoary London Stock Exchange is trying to keep pace with alternative trading platforms by rolling out a new system for high-frequency traders. Unfortunately, it's having trouble. Yesterday, trading was disrupted for two hours when the platform, known as Turquoise, encountered problems.

A preliminary investigation revealed that the issues were caused by "a human error" that "may have occurred in suspicious circumstances." No more details are available, and that statement is impossible to parse, but the upshot is that further planned whizbang upgrades to serve the needs of data-driven traders have been postponed.

The strange circumstances highlight an undercovered trend in the financial markets: the proliferation of alternative exchanges that cater to high-frequency traders. For example, pop quiz: what's the third largest equity market? The answer is BATS, which didn't exist in 2004.

The old-boys -- the LSE and NYSE -- have been steadily losing market share to these upstarts. To defend their competitive positions, they've been trying to keep up technologically, but it's not easy to deliver ultra-low latency and high-throughput trading, particularly when the incentives for disrupting the system are so large.

Via IEEE Spectrum.

Presented by

Saving the Bees

Honeybees contribute more than $15 billion to the U.S. economy. A short documentary considers how desperate beekeepers are trying to keep their hives alive.

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register.

blog comments powered by Disqus

Video

How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well.

Video

Before Tinder, a Tree

Looking for your soulmate? Write a letter to the "Bridegroom's Oak" in Germany.

Video

The Health Benefits of Going Outside

People spend too much time indoors. One solution: ecotherapy.

Video

Where High Tech Meets the 1950s

Why did Green Bank, West Virginia, ban wireless signals? For science.

Video

Yes, Quidditch Is Real

How J.K. Rowling's magical sport spread from Hogwarts to college campuses

Video

Would You Live in a Treehouse?

A treehouse can be an ideal office space, vacation rental, and way of reconnecting with your youth.

More in Technology

Just In