Accelerating Financial Trading

26 March 2007

Nigel Woodward

Intel Intel ConfidentialConfidential

• Warm up act

• Context

• Some of what we have been doing

• Up to speed

• Future pointers

Intel Intel ConfidentialConfidential

Interrelationship business processes and workflows

Capital Markets ….. in evolution

Sell SideSell SideBuy SideBuy Side

Market ServicesMarket Services

BanksBanks

CounterpartyCounterparty

Disruptive and enabling technology

Regulation

Intel Intel ConfidentialConfidential

Intel Intel ConfidentialConfidential

Plimsol Line

Intel Intel ConfidentialConfidential

What’s going on …..• Low Latency arms race• Statistical arbitrage market• MiFID/RegNMS liquidity landscape

– Data sources• Decimalisation – volume/size• Buy Side explosion

– Numbers – hedge funds– Volume– Sophistication

• Electronic• Above and below the plimsol line

Intel Intel ConfidentialConfidential

Hardware

Middleware messaging

GRID, Virtulaisation, Inteconnect

FIX engine

Feed Handler/MDD

(Reuters)

SWIFTGateway

Solution Focus

O_

Network

Plimsol LineAMQP

* Other names and brands may be claimed as the property of others.All products, dates and figures are preliminary, for planning purposes only, and are subject to change without notice.

Intel ConfidentialIntel Confidential

>70% Dual Core

>70% Dual Core

>85% Dual / Multi-Core

Desktop Performance

Server & Workstation

MobilePerformance

Intel dual core volume exiting 2006**

Intel MultiIntel Multi--Core StrategyCore Strategy

**Data is run-rate exiting the year

Intel Single core to Multi-core shipments

20052005 20062006 20072007 Mobile clientMobile client

Desktop ClientDesktop Client

www.intel.com/go/multi-core

Server & WorkstationServer & Workstation

Bringing Parallelism to EveryoneBringing Parallelism to Everyone

Xeon™, Itanium™ , NetBurst™ and Pentium® are trademarks or registered trademarks of Intel Corporation or its subsidiaries in the United States and other countries 9* Other names and brands may be claimed as the property of other* Other names and brands may be claimed as the property of others.s.

FIX to FAST ConversionFIX to FAST Conversion

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300400500600700800900

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essa

ges

per s

econ

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Xeon Woodcrest ClovertownOpteron

Xeon = dual socket, 3.20 GHz Intel® Xeon®Opteron = dual socket, 2.60 GHz Dual-Core Opteron* 285Woodcrest = dual socket, 2.66 GHz Dual-Core Intel® Xeon® 5150Clovertown = dual socket, 2.66 GHz Quad-Core Intel® Xeon® 5355* other names and brands may be claimed as the property of others

Xeon™, Itanium™ , NetBurst™ and Pentium® are trademarks or registered trademarks of Intel Corporation or its subsidiaries in the United States and other countries 10* Other names and brands may be claimed as the property of other* Other names and brands may be claimed as the property of others.s.

IOAccelerationIOAcceleration Technology Reduces LatencyTechnology Reduces LatencyFIX to XML, BizTalk routing, XML to FIXFIX to XML, BizTalk routing, XML to FIX

driving down latencydriving down latency……....

0

20

40

60

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100

120

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50 msgs/sec100 msgs/sec

150 msgs/sec200 msgs/sec

without IOAccelerationTechnology

with IOAccelerationTechnology

2 Woodcrest systems, dual socket, 2.66 GHz Dual-Core Intel® Xeon® 5150

Late

ncy

mse

c

Message Volume

Latency Improvem

ent

Xeon™, Itanium™ , NetBurst™ and Pentium® are trademarks or registered trademarks of Intel Corporation or its subsidiaries in the United States and other countries 11* Other names and brands may be claimed as the property of other* Other names and brands may be claimed as the property of others.s.

"The linear scaling we have seen from Clovertown on our FIX and derivatives messaging applications is very impressive.

The combined Intel/Red Hat architecture gives our clients the performance needed for high volume, low latency market data distribution and high velocity automated trading."

Anders Furuhed, CTO Pantor EngineeringNovember 2006

Speed arbitrage opportunity …….

Xeon™, Itanium™ , NetBurst™ and Pentium® are trademarks or registered trademarks of Intel Corporation or its subsidiaries in the United States and other countries 12* Other names and brands may be claimed as the property of other* Other names and brands may be claimed as the property of others.s.

Fix fix fix fix …….

“Working with Intel’s new Core 2 Duo microarchitecturehas accelerated our Microsoft BizTalk implementation of FIX messaging significantly. Results are impressive with 100ms latency increasing from 75 to 200 messages second. Further increments from multi core and tuning are expected to lift the bar even further.”

Kevin Houstoun Rapid AdditionNovember 2006

Xeon™, Itanium™ , NetBurst™ and Pentium® are trademarks or registered trademarks of Intel Corporation or its subsidiaries in the United States and other countries 13* Other names and brands may be claimed as the property of other* Other names and brands may be claimed as the property of others.s.

Exchange Connectivity …….

Market data and order routing volumes are growingexponentially as a consequence of the spread of algorithmictrading, statistical arbitrage and the number of execution venues.

At the same time, low latency has become a key differentiatingfactor in automated trading.

With Intel Core 2 and Intel in silicon tools, we now havea platform architecture through which to address these requirements

Rolf Andersson, CEO Pantor EngineeringNovember 2006

Xeon™, Itanium™ , NetBurst™ and Pentium® are trademarks or registered trademarks of Intel Corporation or its subsidiaries in the United States and other countries 14* Other names and brands may be claimed as the property of other* Other names and brands may be claimed as the property of others.s.

Turbo charging market data …….

The automated trading evolution is being driven by best execution resulting, competitive and regulatory pressures, as well as revenue opportunities resulting from proprietary statistical-arbitrage.

In tests of Reuters Market Data System (RMDS) 6.0 on Intel® Xeon® processors, we are already exceeding 4 million updates per second and reducing latency with sub-millisecond response times at up to 300,000 updates per second.

We expect dramatic performance using the Quad-core Intel® Xeon® processor 5300 series.

Michael Parlapiano, Executive Vice President, ReutersNovember 2006