CyberTech Rambler

March 7, 2011

At least one problem with LSE’s trading platform is not Linux specific

Filed under: Uncategorized — ctrambler @ 6:52 pm

ComputerWorldUK has the story on what happened behind the scene of the recent London Stock Exchange chaos. At least in the occasion discussed in the article, the Linux-based trading platform is not the main culprit.

The article makes it clear that it is more an organizational problem. You can either blame LSE’s insistance on making change (now reverse) its  data vendors do not want, or blame the data traders for not prepared enough for the change. Either way, we still cannot rule out problems with LSE’s new Linux platform except to say that the article makes it look less likely.

On a previous post on the subject, Ian Easson commented that if LSE and Toronto Stock Exchange (TXE) merge, LSE might use Toronto’s platform. Certainly with the acquisition of Millenium IT and the rolling out of this trading platform, LSE has acquired the expertise to merge the two platform. The merged entity (if the merger happens) might ultimately use TXE trading platform, or use LSE existing platform or ditch both and start afresh.  I don’t think that both exchanges using the same platform will happen anytime soon. If any, the fact that a  transition to the new platform had recently happened, meaning both LSE and companies trading with LSE had recently put a lot of effort and money into the transition, means the momentum for moving towards TXE’s platform, or a new ‘better’ platfrom is not there. Even if LSE is prepare to book the new Linux Platform as a lose on its account books, others will not. Given that the others in this context managed to force LSE into a reversal of its closing price decision, I cannot see LSE force through a platform switch soon.

Like it or not, for better or for worse, LSE is stuck with the Linux platform for the next few years.

The more likely scenario, if the merger goes ahead, is interoperability of the two trading platforms will improved. Both exchange is probably keen on taking the opportunity to acquire  experience  of making the two platform interoperates smoothly because they can use the expertise when they acquire/merge with other exchanges. Another opportunity here is to gain experience on how trading platforms for two exchanges with overlapping trading times behave. Both are important factors  to consider and from an IT planning viewpoint, a better proposition than ditching one platform in favour of another without due consideration.


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