Chicago Stock Exchanges Trades In Its LAN For An Upgrade

Founded in 1882, the Chicago Stock Exchange is the second-largest stock exchange in the U.S. In 1996 alone, investors traded 3.9 billion shares, valued in excess of $124 billion, on the exchange. Operating out of a single location in Chicago, IL, the exchange employs a staff of 200 and has approximately 150 floor brokers and 150 specialists on its trading floor. In 1996, these traders executed over 6 million trades.

Increasing Data Demands Put On The LAN
With billions of dollars at stake, the exchange needs to provide its traders with sophisticated trading applications and instant access to stock prices and worldwide financial news. The traders also need to communicate in real time with stock exchanges on the East and West coasts to transact trades.

The exchange's previous shared Ethernet hub local area network (LAN) and router-based backbone network, however, lacked the bandwidth to support increasing data flows and new applications. As a result, the exchange had to upgrade its network, particularly on the trading floor, to better deliver its services and prepare for future expansion.

Higher Level Of Connectivity Required
The exchange needed to provide high-performance links from each trader's workstation on the trading floor to DEC VAX servers in the data center where applications reside. This connectivity had to extend to other stock exchanges around the country, like the New York Stock Exchange, and financial information services, which provide the latest stock pricing. The exchange's challenge, however, was to upgrade the network with minimal disruption to the trading floor. An interruption of service for the slightest duration would preclude traders from transacting stock transactions in a timely manner and result in substantial losses for their customers.

The Networking Technical Solution
The exchange decided to upgrade its network to a switched architecture based on 3Com networking solutions. The exchange chose the CoreBuilder 6012 high-function switches for their flexibility and performance. The devices support both 10 and 100 Mbps links as well as many types of packet switching. By extending the FDDI rings over both switches, the exchange benefits from the security of fault-tolerant redundancy.

Solution Prevents Disruptions In Trading Activities
The exchange selected the CoreBuilder 2500 switches for their 16-port density. Since each workstation connects to two CoreBuilder 2500 ports, the firm is able to migrate up to eight traders at a time from shared Ethernet to switched Ethernet connectivity, thereby reducing disruptions of trading activities. In addition, should any switch fail, only eight users will be affected, which keeps the failure-to-user rate at a minimum.

The exchange opted for 3Com's NETBuilder II routers and SuperStack II Hub 10s for their reliability and manageability by Transcend Enterprise Manager software. Using advanced 3Com SmartAgents and remote monitoring (RMON) software embedded in 3Com Switches, hubs, and routers, the application's remote monitoring capability simplifies the task of enterprise-wide network management. In this way, the exchange is able to gain complete surveillance and control over 3Com devices and ensure the trading floor with the highest levels of dependability and performance.

Applications Operating On The Network
Specialized trading applications on the floor run DEC's VMS protocols. Key applications include: Max (Midwest Automated Execution Program), which executes trades with specialists; ITS, which verifies transactions with New York Stock Exchange; and AutoQuote, which enables traders to quote stock prices. The exchange will soon deliver Internet access to the trading floor and will supply users with the Microsoft Internet Explorer browser. The firm also will soon offer intranet services to provide staff with policy, employee benefit and other key internal information.

With the network's enhanced performance, users now quickly execute trades across the country and access critical financial information and data in real time. And with the bandwidth now available, the firm can easily add more applications in the future.