Looking out over the trading floor of the Chicago Board Options Exchange (CBOE) you can see the frantic buy and...
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sell calls coming from the hands and mouths of traders below. With their uniquely colored jackets and handheld devices, traders from different firms are hedging their bets on the risky and rapidly changing world of options trading.
But, behind the scenes there are no shortage of deals and no shortage of bets. The difference between the transactions on the floor and the transactions in the world of storage all seem to be commonplace in the middle of this financial center located on the Windy city's LaSalle and Van Buren street.
It took less than an hour for Jeff Caldwell to grow the CBOE's (pronounced by Caldwell as see-BO) data center by 2 terabytes of storage. A call from Caldwell's boss for an impromptu meeting came in at 10:15 a.m. and by 11 a.m. the CBOE had expanded its data center from 24 to 26 terabytes.
Caldwell, the CBOE's director of systems and storage planning and 'the other half of his brain' -- supervisor of technical support and systems operations Dale Hosimer, have created a two man storage department that is manning the CBOE's storage infrastructure on a budget that is low by industry standards.
"Right now the CBOE's budget for storage is about 10% of the overall IT budget, while other large companies tend to spend about 15-25% on storage," said Caldwell.
With the constraints on the budget, the purchase of an LSFD178 from LSI Logic to store disk-to-disk archived data was primarily based on pricing. For the traders at the CBOE Caldwell says the 'now' quote data is far more important than the data created a week or a few months prior. In order to store the data in the event of a Securities Exchange Commission (SEC) inquiry, or imposed by government regulations the storage team is implementing a 'good-disk, cheap disk' policy.
The 'good-disk, cheap disk' policy will separate the data that is time-critical (about 90% of the data accessed is within the past three months) and put the less time-critical data on cheaper disk space.
'SAN Land' is no dream
The CBOE is making a move off the mainframe but so far the move has been far from smooth. The transition to an all open-system environment has been the plan since 1996. But today they're still using mainframe systems OS/390 and TPF.
Hosimer and Caldwell diagnosed that the front-end of their systems are starved and they have a lot of capacity on the back end. So, later this year they will begin to move to a SAN environment. Caldwell says they know that a SAN architecture is the only way to open the front ends up.
This will be the CBOE's second foray in to the SAN arena.
"We've had some misadventures in SAN land," said Caldwell. "Several vendors said that SAN offered tape-sharing capabilities like on a mainframe. We chose a [vendor] partner and they exceeded their reach. Six months later we had yet to [achieve] backups with any integrity."
Following this debacle, they immediately dismissed the SAN concept for about a year. This second go around they are going to attempt a different approach to SANs. Instead of creating a massive 'SAN highway' they are going to look at creating SANs that unify the islands of storage and create a more sophisticated architecture without going over an IP network.
Online options trading explodes
These days CBOE infrastructure isn't only designed to support traffic created by the approximately 2000 traders on the floor of the exchange, but now has to factor in the boom in online options trading.
According to the USA Today, online options trading is taking off. In some cases online brokerages are reporting a nearly 100% increase in online options trading. The article cites three factors in the online options lift-off -- fear, greed and automation.
In the post September 11 economy, options provide a way for investors to hedge their bets that the stock market will not only go up, but turn south.
In order to handle this flow of online activity, the CBOE storage department has invested in Sun architecture to handle off-site trading.
"That is our first move off of the trading floor. Screen-based trading will become more of a centerpiece, but hopefully we'll have parallel worlds," said Caldwell.
The only thing keeping the traders on the floor is largely a political issue where traders say they feel the mood of the markets better when they have the ability to assess the mood in the pits.
This sentiment by traders is dismissed by Hosimer and Caldwell as they cite the advent of software employed by off-site brokerages and traders that actually has the ability of charting the swings in market activity traders have become accustom to relying on.
No matter where the trades are coming in from, you can be sure that the action is as frantic in the back rooms of the CBOE as it is smack in the middle of the trading floor.
For additional information about the Chicago Board Options Exchange, visit its Web site.
For more information about LSI Logic, visit its Web site.
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