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7ticks Deploys Correlix for Latency Monitoring

October 19, 2009

Chicago-based managed services provider 7Ticks is rolling out New York-based latency monitoring technology vendor Correlix's Latency Intelligence suite to support internal monitoring and performance analysis across its infrastructure.

7Ticks is completing the deployment of Latency Intelligence in its Chicago datacenter, and plans ultimately to use it to monitor market data latency from futures and derivatives venues, including CME Group, the Chicago Board Options Exchange, IntercontinentalExchange and NYSE Euronext's Liffe market, as well as equities venues that the vendor plans to connect to next year, says John Heflin, chief information officer at 7Ticks.

Initially, though, 7Ticks will use Correlix as an internal tool to monitor the order execution latency of clients, including market makers, major banks and their low-latency trading divisions, hedge funds and proprietary trading firms.

The Correlix solution enables 7Ticks to perform "multi-tiered analysis," Heflin says. "We can follow the lifecycle of an order from the client, through our datacenter infrastructure to the exchange, back out of the exchange, through the infrastructure and back out to the client," to support the troubleshooting of specific orders, such as to determine how latency is introduced by market gateways or network hops, he says. Previously, such in-depth packet analysis could take between four and eight hours for each order, but now takes only minutes using Latency Intelligence.

"This tool gives them the ability to monitor the flow and the latency for every trade at every stage, so if a customer calls and asks what happened to a specific trade or why the orders seem slow, 7Ticks now has an internal tool that enables them to answer the question quickly," says Correlix chief executive Shawn Melamed.

Latency Intelligence also enables 7Ticks to perform comparative analyses-for example, to compare average or peak latency between markets, for the same market over different timeframes, or between specific traders-which could then be taken into consideration when fine-tuning its infrastructure. In addition, the monitoring tool can be configured to alert 7Ticks in real-time when latency breaches acceptable levels for trading, enabling the vendor to be more proactive in its monitoring, Heflin says.

The vendors conducted a three-month proof of concept of Latency Intelligence in a production environment to provide visibility into order-specific latency, allowing 7Ticks to test the functionality of the tool and its performance under heavy loads.

7Ticks is also joining Correlix's RaceTeam peer-to-peer latency monitoring service, so clients who sign up for the service through Correlix will be able to see their own trade latency as captured by 7Ticks' Latency Intelligence deployment. "[7Ticks customers] can actually tune their strategies to leverage this new type of information, which lets them monitor in real time and detect if there's a problem with a specific market venue or if one of their strategies is problematic," Melamed says.

7Ticks plans to roll out Correlix to its other facilities in New York, New Jersey, London and Frankfurt by the third quarter of 2010.

Vicki Chan

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