Tag Archives: trading

Time out of joint

Financial trading venues and trading systems operate so quickly and rely on clocks so deeply that events like the one noted in this FINRA report are more common than many understand

The findings stated that the firm transmitted to OATS New Order Reports and related subsequent reports where the timestamp for the related subsequent report occurred prior to the receipt of the order,

In electronic trading such errors are easy to make. Two computer servers split the work in some data center and the clock on one is 10 milliseconds faster than the clock on the second. The faster device sends an order to a market and stamps it with the time. The slower device gets the response from the market and stamps it with the time.

Real time Server One Server Two
12:00 Send order clock=12:00.010 Clock=12:00
12:00.05  Clock=12:00.15 Get confirmation. Clock=12:00.05

In fact, for many trading organizations this is scenario does not even require two servers because their clocks can jump backward.