Servers Optimized for Extreme Low-Latency Trading

Enterprise-Class Turnkey Server Solution with Supermicro Hyper-Speed Hardware Acceleration Extreme Low-Latency Trading
Todays global finance industry runs on blazing-fast speed. With securities transactions occurring in microseconds and moving towards nanoseconds, capital markets trading firms that achieve the lowest latency will prosper while slower competitors will fall rapidly behind. Extreme lowlatency with highest performance and greatest stability are thus increasingly important requirements of successful investment banking and hedge fund operations engaged in low-latency algorithmic and highfrequency trading. As much as 65 percent of global securities trading is automated today (Chart 1). Trading firms have devised many strategies to reduce latency in these electronic networks including colocation at securities exchanges, specialized trading software and algorithms (leading to the term algorithmic trading), ultra-fast networking, and extreme low-latency optimized server platforms. An ongoing focus is to reduce server latency, driving demand for server platforms optimized for this critical feature. Only the fastest, most powerful servers can be used for lowlatency trading to remain competitive. Securities firms must quickly process market data (see Figure 1) and rapidly submit trade requests with extremely low response times, so achieving the lowest latency is critical for success. But this is not enough to support successful high-frequency trading strategies, because randomized variations in latency, called jitter, will also create suboptimal trading patterns that may corrupt trading algorithms and lead to undesirable results. This jitter must be controlled and the server systems must be designed to perform reliably with minimal downtime. An additional requirement is the ability to deploy server solutions as turnkey packages to minimize costly engineering resources that would need to be dedicated to hardware tuning.

Matching Engine Server

Stock Exchange owned

At colocation site in Stock Exchange Broker-Dealer owned

Order Router Server

Firm A

. . .

Firm N

At colocation site in Stock Exchange Hedge Fund, Trading Firm owned

Trading Decision Servers

Figure 1: High Performance Trading Network Diagram Chart 1: Low-Latency Trading as share of stock trading (New York Times)

Advanced automated exchanges for new classes of assets, such as equity options and futures, continue to emerge globally, and trading volumes are rapidly increasing as more participants enter the financial markets through globalization and expanding economic activity. These trends are driving the expansion of trading worldwide. Demand for the latest technology server platforms will continue to grow to provide trading firms with powerful competitive advantages.
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Hyper-Speed Servers Optimized for Extreme LowLatency Trading

Supermicro developed the Hyper-Speed product line to address the unique requirements of the global low-latency trading industry. This optimized combination supports the advanced features that are required for High Performance Trading as detailed below:
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Lowest Latency
An enterprise-class x86 dual processor design was selected as the optimal platform for highest performance with the requisite RAS features to support a mission critical financial application, while still allowing for quick ramp-up with software development. The highest speed CPUs supporting the fastest memory frequency were utilized for maximum hardware acceleration characteristics to minimize processing latency. Network latency was enhanced by the selection of the lowest latency 10G/40G add-on networking cards for qualification and integration of Solarflare, Mellanox, and Chelsio NICs with the Hyper-Speed solution.

CPU Dual E5-2687W v2 Memory 8 DDR3 ECC. Reg.

Core 16 Quantity 8

Power 150W Power 1.5V

Base Freq. 3.4 GHz Base Freq. 1866 MHz

Hyper-Speed Freq. 3.74 GHz (16 active cores), 4.16 GHz (2 active cores) Hyper-Speed Freq. 1941 MHz

Minimal Jitter
To reduce jitter, Supermicro tunes each server BIOS prior to product shipment. When the system is initialized, the servers Smart-Stepping BIOS automatically accelerates the system with a lockstep algorithm to ensure stability. The BIOS is also specially designed to keep the CPU Turbo Mode maximized and stabilized to prevent system performance fluctuations, while the proprietary interrupt management system limits the frequency and duration of interrupts to lower latency outliers.
Figure 2: SYS-6027AX-72RF/TRF-HFT3

Enterprise Class Highest Reliability

Hyper-Speed servers were designed with the highest quality server-grade components to ensure reliable performance under extreme operating conditions. An optimized system layout, large high-speed chassis fans, and proprietary winged passive heatsinks provide rock-solid thermal stability using an easily managed air cooling infrastructure. The system is housed in an optimized 2U form factor for best component thermals, PCI-E slot utilization, and energy profile.

To enhance Hyper-Speed server quality, Supermicro pre-screens the processors, memory, low-latency NICs, and serverboard during production to ensure complete system reliability during an extended 10 day burn-in process. Supermicro pre-accelerates the CPU and memory so customers can focus their engineering resources on software development and tuning. All of this is enhanced with Supermicros enhanced warranty terms, available onsite service packages, and dedicated support and customization from the Hyper-Speed core product team.

Hyper-Speed Latency and Jitter Performance Benchmarks

The latest generation Supermicro Hyper-Speed system utilizing the E5-2600 v2 series of processors was compared to the previous generation Hyper-Speed server utilizing the E5-2600 processor series, which had already demonstrated industry-leading latency. Mellanox MCX354A cards run in 10G Ethernet mode were direct-attached with a copper SFP+ cable. Table 1 details the configurations of these two generations of Hyper-Speed servers used for this benchmarking test.
System SKU CPU Memory 8x 8GB 1600 MT/s RDIMM 8x 8GB 1866 MT/s RDIMM Common Components 2x Supermicro SNKP2048P Heatsinks Intel 520 series 480GB SATA3 drive Mellanox MCX354A card Scientific Linux OS

Hyper-Speed Turnkey Solution

The Supermicro Hyper-Speed server system is offered as a total customer solution. It consists of a SuperServer 6027AX 2U rackmount server system featuring two of the latest generation Intel Xeon processor E5-2687W v2 Product Family (TDP 150W), 64GB of DDR3 ECC 1866MHz RDIMM memory in 8 slots for highest bandwidth, 6 PCI-E 3.0 slots for fastest I/O bandwidth, SAS2/SATA3 hot-swap HDDs for greatest throughput, and IPMI 2.0 server management over dedicated LAN with Supermicros suite of out-of-band management software, and redundant 1280W Platinum Level (95%+) Digital highefficiency power supplies. This system is shown in Figure 2.

Intel Xeon SYS-6027AX-72RF- 2x processor HFT1 E5-2687W Intel Xeon SYS-6027AX-72RF- 2x processor HFT3 E5-2687W v2

Table 1: Hyper-Speed Benchmark Configurations

The benchmarking software utilized by Supermicro rapidly transmits 70-byte UDP protocol packets at 1 million messages per second to the Hyper-Speed system and the distribution of latencies was logged and then compared between the two systems. The results are shown in Table 2 below.
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Previous Generation Server min: 1.680s 1st Percentile 1.723s 5th 1.742s 10th 1.751s 15th 1.757s 20th 1.764s 25th 1.769s 30th 1.775s 35th 1.781s 40th 1.786s 45th 1.792s 50th 1.798s 55th 1.803s 60th 1.809s 65th 1.815s 70th 1.815s 75th 1.894s 80th 2.178s 85th 2.430s 90th 8.491s 95th 8.837s 99th 8.970s max: 23.228s Table 2: Hyper-Speed Benchmark Results

Latest Generation Server min: 1.492s 1st Percentile 1.518s 5th 1.527s 10th 1.531s 15th 1.534s 20th 1.537s 25th 1.540s 30th 1.543s 35th 1.546s 40th 1.550s 45th 1.556s 50th 1.565s 55th 1.577s 60th 1.583s 65th 1.588s 70th 1.588s 75th 1.598s 80th 1.604s 85th 1.619s 90th 1.947s 95th 1.978s 99th 2.020s max: 2.801s

tune, and test themselves. Pre-qualified NIC cards, pre-screened components, factory installation with enhanced burn-in for up to 10 days, and system tuning by Supermicro ensure that the HyperSpeed systems will operate flawlessly out of the box, resulting in lowest CAPEX. Remote management is also paramont because Low Latency Trading firms cannot easily access collocation centers. Supermicro Hyper-Speed systems include integrated IPMI 2.0 with dedicated LAN and a suite of enterprise-class management utilities to remotely monitor, control, and automate updates to servers quickly and effortlessly as a standard feature to providing customers maximum serviceability. Since collocation space can cost upwards of $10K per month to lease a server rack, high server density is also important. The Supermicro Hyper-Speed 2U form factor optimizes density while allowing sufficient air cooling to keep the system performance maximized and stabilized, providing the best server OPEX. Access to the most advanced hardware with planned refresh cycles is also a critical success factor. This allows trading firms to outpace their rivals in low-latency trading to maintain a competitive advantage. As a leading server supplier, Supermicro has committed to providing the latest technology improvements and continuing its reputation for industry-leading best TTM with the Hyper-Speed platform. Finally, Supermicros enhanced warranty terms, onsite service options, and dedicated global support team reduce trading firm personnel expenses, inventory, and training costs.

The left side of Table 2 shows the latency distribution using the previous generation Hyper-Speed server. Note a median latency of 1.798s at the 50th percentile, 99th percentile latency of 8.970 s, and a maximum latency of 23.228 s. The right side of Table 2 shows the latency distribution using the latest generation server. Note the median latency has dropped to 1.565 s, 99th percentile latency to 2.020 s, and the Max latency to 2.801 s. This shows a latency improvement of 15% due to the higher clock speeds attainable on the E5-2600 v2 series CPUs, and an astonishing 94% drop in jitter (calculated by subtracting the 99th percentile latency value from the 50th percentile latency value for the two generations of servers) due to the optimizations in the BIOS, and fine-tuning of signal integrity on the latest generation HyperSpeed platform.

Hyper-Speed Solution Summary

The Supermicro Hyper-Speed server solution was designed to satisfy the critical performance, latency, and jitter requirements of the global finance Low-Latency and High-Frequency Trading industry. Enterprise-Class reliability is combined with leading latency and jitter to provide the most optimized trading solution. The Hyper-Speed offering is available as a turnkey solution, fully qualified at the factory, supported by a generous warranty, and backed up by Supermicros 24/7 worldwide customer support and onsite service options. Hyper-Speed benefits include high density for best CAPEX, highest efficiency for best OPEX. Brokerages, hedge funds, stock exchanges, and other securities trading organizations in the Low-Latency Trading industry seeking a critical competitive advantage should consider the Supermicro Hyper-Speed server solution as part of their business strategies. Supermicro is committed to a long term roadmap of low-latency trading solutions and providing the latest, most advanced technology with the best TTM. For more information visit www.supermicro.com/Hyper-Speed

Hyper-Speed Benefits Review

Supermicro Hyper-Speed systems offer brokerages, hedge funds, and other securities trading firms many benefits, including reduced capital expenses (CAPEX) and operating expenses (OPEX), as well as enhanced revenues and profits. To a major brokerage firm a 1-millisecond advantage in trading applications can be worth $100 million a year in increased revenues by one estimate reported in InformationWeek. Supermicro Hyper-Speed systems that are optimized for best latency, jitter, and reliability can thus help trading firms enhance their top lines by employing the most advanced server systems available. A further benefit is Supermicro Enterprise-Class server architecture, design, and components that ensure continuous operation with lowest downtime, thus minimizing troubleshooting and servicing expenses. The Supermicro Hyper-Speed turnkey system saves customers expensive time and manpower over systems they must integrate,
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Super Micro Computer, Inc. Specifications subject to change without notice. Intel, the Intel logo, Xeon, and Xeon Inside are trademarks or registered trademarks of Intel Corporation in the U.S. and/or other countries. All other brands and names are the property of their respective owners.