Wonder

Research Outline

Prepared for Mat M. | Delivered December 10, 2019

Stock Market Technology

Goals

To understand the technology required to run a stock market.

Early Findings

While not exactly a stock market itself, some similar principles will apply. The technology needed to run a trading platform includes: authorization system, user page to manage personal data, view/edit data interface, payments and transactions mechanisms, newsfeeds, real-time tracking, deposits, quote monitoring, search, analytics, sorting/filtering and push notifications.
The NYSE and several other major stock markets use an auction-based system to trade. Therefore, the relevant technology would need to support this 'bidding' system for direct buyer-seller relationships.
The NYSE uses actual humans on the trading floor, so the technology would look quite different than another stock market type.
However, NASDAQ (and others) use a dealer market. A system would need to support these market-makers listing prices to facilitate buying and selling between the relevant parties. All trading is done electronically from no particular location.
NASDAQ uses the Small Order Execution System to automatically execute traders under 1,000 shares.
Its backend technology is essentially broken down into 3 components: the interface, the matching engine and quote services. The matching engine is apparently a single, high-powered computer.
The London Stock Exchange uses a system called the Millennium Exchange. The system is Linux-based and runs on commodity Intel hardware.
There are reportedly about 20 trading platforms in use in Europe.
The Tokyo Sotck Exchange recently announced it was upgrading its "arrowhead" trading system in partnership with Fujitsu. 

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Prepared By

Megan B.

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