At the Chicago Mercantile Exchange, the traders betting on future
commodity price fluctuations aren't the only ones who know what it
means to take a risk. Five years ago, Chicago Mercantile Exchange (CME),
now part of the CME Group, placed a hefty bet: that it could trust
Linux with the heart of its business, executing billions of contracts a
year and processing them faster than previously.
Move from Solaris to RHEL boosts performance for the Chicago Mercantile Exchange
By Pam Derringer, News Writer
15 Apr 2008 | SearchEnterpriseLinux.com
CME won its gamble. And in so doing, it proved that an open source
platform, a relative newcomer to the data center scene in general and
the financial world in particular, had the power and speed to handle
high-volume, real-time, mission-critical applications.
Outmoded servers, transaction times prompt migration
The Exchange's 800 Solaris Sparc servers, which were simply outmoded,
nudged CME in the direction of Linux. "We were starting to have issues
with Sparc," said Vinod Kutty, CME's associate director and head of
distributed R&D computing. Not only did they cost too much to
support, but it wouldn't have been able to keep pace with the projected
increase in trade volume, especially with electronic trades growing
even faster than the business as a whole and pit trades on the floor
becoming less predominant. "We wanted to save money and get much better
Another factor in the conversion was latency. The technological bar
is continually rising on how fast a transaction must be completed to be
considered "real time," but Kutty defines it, futuristically, as a
single millisecond. At the time of CME's conversion, the Sun Sparc
servers were averaging 200 milliseconds per transaction, about twice
what was considered real time in 2003, he said. Today 15 to 20
milliseconds is the benchmark, he said.
We have historically noticed that when we improve the performance of the trading engines, traders will trade more often.
associate director and head of distributed R&D computing,, the Chicago Mercantile Exchange
Although people can't physically react any faster
to trades that occur in a tiny fraction of a second, it's still
important to come as close as possible to real-time transactions
because it affects the perceptions of traders, Kutty said.
"We have historically noticed that when we improve the performance
of the trading engines, traders will trade more often," he said. "The
faster they trade, the more they can trade, and the faster their orders
Therefore, in 2003, CME began a gradual migration to X86s running Red Hat Enterprise Linux (RHEL)
2.1, starting with less critical applications, then progressing to
order-entry programs and, finally, to the mission-critical trading
applications, he said. At each stage, the system was fully tested
before progressing to another application, he said. The transition was
completed in 18 months at the end of 2004. The operating systems have
been continually updated as well, with the servers now running a mix of
RHEL 3 and 4 and certification of RHEL 5 currently in process.
The timing of the transition proved fortuitous. Two years later, CME
would acquire yet another boost in transaction volume from its merger
with the Chicago Board of Trade, hence the name change to CME Group.
In the five years since the conversion began, the number of servers has
grown from 800 to 4,000, the number of electronically traded contracts
from 250 million to 1.2 billion in 2007. The dollar value of those 1.2
billion contract trades is $1,200 trillion.
In addition, the new RHEL-based servers run much faster, chopping
transaction speed from 200 milliseconds to 15 to 20 milliseconds and
are still heading downward, Kutty said. In two ways, CME helped to
accelerate transaction speeds: first, by optimizing the TCP (Transfer
Control Protocol) and second, by creating a Super HOP (Host Output
Process), that routes trade orders and confirmations through a group of
fast, high-powered Linux servers, he said.
Not without a hitch
Although the platform switch has been successful, the transition wasn't
problem-free. "We've had issues with the kernel performance," Kutty
said. "Earlier versions of Linux were less stable."
Another challenge was retraining Solaris users in Red Hat monitoring
tools, Red Hat's certification program is "one of the better ones," he
An ongoing issue is the need for a broader mix of open source
diagnostic tools that would provide visibility into the factors
impeding real-time performance without disrupting ongoing operations,
he said. In addition to more diagnostic tools, CME also would benefit
from a lightweight version of the operating system that could be
simulated in a lab for troubleshooting purposes, Kutty said.
On the positive side, CME has reaped the benefit of problems solved
within the greater open source community instead of waiting for a fix
from a proprietary vendor, he said. And because OEMs have access to the
source code, they can do a lot more testing, which in turn speeds issue
resolution, he added.
The migration to Linux has paid off in improved performance, lower
cost and greater stability, Kutty said. In addition, CME has gained
better leverage with vendors, which translates into more price leverage
for support services, he said.
Although CME has been an industry early adopter in moving to open
source, its success has yet to create a stampede of followers. One
reason, Kutty speculated, is that OEMs aren't designing servers
specifically to run Linux; if they were, the hardware would be easier
to use innovatively and easier to manage, he said.
Even so, the experience of the Chicago Mercantile Exchange proves that
Linux is ready to fill mission-critical roles in the enterprise, Kutty