The Sun Java Real-Time System Meets Wall Street
TS-1205

Today's financial institutions use program trading systems to automatically execute split-second trades based on sophisticated algorithms that assess current market conditions. Trade decisions and execution must occur in a timely fashion to capitalize on the market. Missing a trade opportunity, even by a few seconds, can lead to significant losses.

With improvements in Java technology performance, firms are starting to use Java technology to implement these algorithms and thereby realizing productivity gains over more-traditional C/C++ development. However, in these time-critical systems, there is still no guarantee that at any instant, the process will not be interrupted by the Java platform garbage collector. Although trade execution occurs most of the time within an acceptable response time, the trade execution is delayed every once in a while, due to garbage collection or some other system event.

Sun's implementation of the Real-Time Specification for Java (JSR 001), the Sun Java Real-Time System, enables real-time processing through techniques that protect important threads from garbage collection and other system interrupts. This means that trading systems can confidently monitor the market and take action consistently within a calculated window of opportunity.

To demonstrate the impact of these techniques, Sun's OEM Software Systems Engineering technical team has written a demonstration of a trading system that uses real trade data. The demonstration compares a regular Java virtual machine against the Sun Java Real-Time System. For each run, a graph shows the difference in the actual trade price and the price when the trade should have executed. Running this trading system with the Sun Java Real-Time System shows that no money is lost due to garbage collection latencies. The results will be contrasted with the same application run with the standard (non-real-time) Java virtual machine.

This presentation demonstrates a working system and proves real-time Java technology's ability to satisfy hard real-time trading requirements.

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