In a series of tests, TransactTools have ratified Chi-X’s claims that it will be ten times faster than the incumbent stock exchanges. Chi-X Limited, the European equity alternative trading system (ATS) owned by Instinet, says that its round trip latency has been measured at 10 milliseconds-or 1/100th of a second-after a series of latency and throughput tests performed by TransactTools.
“Based on Instinet’s internal system performance measurement statistics for average DMA order routing speed to the incumbent European stock exchanges, we believe Chi-X is more than 10 times faster than them, when compared to TransactTools’ results,” says Peter Randall, Director of Instinet Chi-X Limited.
TransactTools’standard benchmark tests found that over 95 per cent of messages sent to Chi-X were responded to in an average of 10 milliseconds-a measure that includes the client-side infrastructure latency involved on either side of the transaction-with the fastest response time being four milliseconds.
For high volume throughput testing, in which five million messages were generated in total, Chi-X maintained an average roundtrip latency of 18 milliseconds while handling 16,000 messages per second. Chi-X’sinternal latency, which is a measure of the system’s ability to process messages in its core rather than the roundtrip measurement, was measured by Instinet Chi-X at 890 microseconds, or less than one millisecond.
“We believe Chi-X is set to change the face of equity trading in Europe, offering benefits that will resonate with traders and regulators alike,” says Randall. “MiFID is rightly focusing the industry’s attention on meeting best execution requirements. Many recognize execution cost as an important element, but speed of execution is fundamental in this equation as well. From the beginning we have designed Chi-X to be an ultra-fast alternative to the traditional European venues, and feel that TransactTools’ findings bear out our claims.”
“Our results demonstrate Chi-X is well-positioned to set a new standard for speed and capacity in electronic European equities trading,” adds Sam Johnson, CEO of TransactTools. “As the leading independent provider of high-throughput, low-latency messaging technology, our professional services group was an obvious choice to run these tests for Instinet.”
Instinet Chi-X Limited, an independent subsidiary of Instinet Europe Limited, is an FSA-authorised securities firm operating as an AlternativeTrading System (ATS) and MTF (Multi-Lateral Trading Facility under MIFID) for the trading of European equities. Instinet Chi-X iscurrently available in live beta production.