BMO Capital Markets is a leading, full-service financial services provider, with more than 2,000 employees. The firm offers corporate, institutional, and government customers access to a complete range of investment and corporate banking products and services. BMO Capital Markets required more powerful computing resources to analyze the growing volume of financial data and ensure that its financial traders could process transactions more effectively. Today, the firm is using Windows HPC Server 2008 R2. The end-to-end high-performance computing (HPC) platform enables the firm to ensure that computing power can be made available to any part of the firm that needs it. The company is using the HPC solution to better analyze the growing volume of financial data, calculate the financial exposure, and speed up the process of providing credit risk calculations to the business. Situation
Life on the trading floor has never been for the weak. Sometimes beginning their day at dawn and working late into the evening, financial traders need to remain focused, despite the millions of messages and reams of information coming their way from multiple different directions, all at different times. If trading required a unique skill before, those requirements have only multiplied since the onset of the global financial crisis and as trading continues to become more technology bound in nature.
To put the speed at which things operate on the trading floor into perspective, the blink of a human eye takes about 400 milliseconds. The best trades out there—meaning the market data is received, the risk is determined, the decision is made, the trade is matched, and a trade confirmation is received—happen in .15 of a millisecond. The old adage “time is money” has never been more true in today’s trading environment.
||Being able to provide our traders with the best tools available to speed up trading and risk analysis helps deliver a huge competitive edge. We’re confident that Windows HPC Server 2008 R2 will help us minimize future costs and add greater flexibility to scale for growth.
Senior Business Technology Specialist, Enterprise Infrastructure, BMO Capital Markets
As one of the leading financial services providers in North America, BMO Capital Markets buys and sells financial instruments, such as stocks, bonds, commodities, and derivatives and has more than 1,200 traders worldwide.
To stay at the top of its game, BMO Capital Markets seized the opportunity to refresh its high-performance computing (HPC) environment to help traders better analyze the growing volume of financial data, calculate the financial exposure to the firm’s more than 1,000 trading counterparties, and speed up the process of providing credit risk calculations to the business.
Trading is becoming more digital in its processes, and today more than 55 percent of trading activities globally are done electronically. On an average day, BMO Capital Markets needs to be able to process millions of messages per second, and it’s up to traders to keep pace with the flow of information that feeds their trading decisions. BMO Capital Markets traders must also use the tools and resources at their disposal when evaluating risk to ensure they can take advantage of breaking economic news, market activity, and price fluctuations. Traders are bound by credit limits, and those can run in tens and hundreds of millions of dollars. By day’s end, each trader needs to be within their credit limit, and technology is what helps the trader calculate and monitor this accurately and as close to real time as possible.
“In our industry, you either have the technology to be in that game or you don’t have a business,” says Sorin Manta, Senior Business Technology Specialist, Enterprise Infrastructure at BMO Capital Markets. “There’s a lot of information coming at you on multiple screens, and our traders need a powerful computing environment that can handle the sheer volume of data and multitasking. We knew that if we could increase our computing power, our trading desks would be able to increase their performance and make faster and better financial decisions. It is impossible to perform any algo trading today without top-notch technological capabilities.”Solution
To enhance the ability of its traders to better analyze financial data, conduct more real-time risk processing, and process those computations faster, BMO Capital Markets looked at updating its HPC environment. In 2008, the company upgraded its IT environment to 64-bit technology and deployed the Windows Server 2008 operating system and is now using Windows HPC Server 2008 R2 to extend its existing high-performance computing clusters. BMO Capital Markets worked with Microsoft Gold Certified Partner Infusion to develop an initial proof-of-concept for the new HPC deployment.
HPC is a branch of technical computing that uses supercomputers and cluster computing to solve computationally intensive problems. Windows HPC Server 2008 R2 provides BMO Capital Markets with a software solution that is easy to deploy, cost effective, and scalable. Microsoft has created an ecosystem of independent software vendors (ISVs) and partners who can build on the platform to provide industry-specific programs that meet the market’s exact needs.
“The end-to-end platform provides greater scalability from workstation to cluster by allowing us to harness the power of distributed computing through a familiar desktop environment that is based on the Windows operating system, including the potential to enhance Microsoft Excel,” says Manta.
BMO Capital Markets is currently evaluating using HPC Services for Excel 2010 in Windows HPC Server 2008 R2. By using these enhanced capabilities, BMO Capital Markets will eventually benefit from more powerful analysis and computation to reduce calculation time of huge, complex spreadsheets—which, in turn, will help the firm make better decisions, faster.
According to Bill Baldasti, Vice President of Sales at Infusion, BMO Capital Markets is using the Microsoft solution to boost its computing processing power so that it can reduce the time needed to perform these computational-intensive tasks.
“Traders need more computational power to more quickly and easily calculate risk via Excel spreadsheets, and the new clustered environment helps to access additional CPU power from unused PCs running the Windows 7 operating system. This helps to aggregate the workflow across the enterprise, enabling users to crunch this information in a timelier manner,” says Baldasti.
Today, the firm operates in a centralized, high-density cluster environment running four computational grids. This includes one large grid running intra-day and overnight grids for capital markets for trading business, and smaller grids responsible for testing and calculating market risk. The firm is also evaluating using Windows HPC Server 2008 R2 to distribute computational workloads on PCs that run Windows 7.
||We need to be able to process a few million messages on a regular basis, and the new HPC solution serves to facilitate this.
Senior Business Technology Specialist, Enterprise Infrastructure, BMO Capital Markets
The firm is also using the HPC platform to achieve additional savings by reducing hardware requirements; Windows HPC Server 2008 R2 helps BMO Capital Markets run its business-critical applications and business processes faster and more reliably than ever before. Benefits
For traders at BMO Capital Markets, information is power. Now they are better equipped with the technology processing power they need to be competitive within fast-paced capital markets.
Greater Competitive Edge
As pressure on financial services firms to uncover risk and determine their exposure in today’s economic climate grows, BMO Capital Markets is now using Windows HPC Server 2008 R2 to perform more real-time or intra-day risk analysis of trades and their impact on portfolios. The new integrated platform for computational clustering provides the firm with enhanced capacity for a low total cost of ownership and no increase in IT staff size.
For example, in the past it could have taken up to eight hours to run one risk analysis scenario. Today, it can be done in less than six minutes. At BMO Capital Markets, the data processing starts right after the market closes and end-of-day processes are completed, and it doesn’t stop until early the next morning in order to maximize the information that can be made available to the traders when the market opens.
“It’s a high-pressure environment with millions of dollars at stake, so being able to provide our traders with the best tools available to speed up trading and risk analysis helps deliver a huge competitive edge,” says Manta. “We’re confident that Windows HPC Server 2008 R2 will help us minimize future costs and add greater flexibility to scale for growth.”Better, Faster Decision Making
BMO Capital Markets specializes in anticipating and responding to fluctuating interest rates and currency values, managing financial relationships with trading partners, and navigating the regulatory landscape. Improving the time that new financial products can come to market is a business-critical competitive factor for the firm’s traders. BMO Capital Markets is now in a better position to increase the number of models and scenarios that it evaluates because of its move to Windows HPC Server 2008 R2.
“It’s all about time-to-market and the ability to integrate risk models faster as our systems need to process millions of messages at lightning speed. Right now, certain trading strategies that we participate in on the equity side have rates of millions of messages a second. We need to be able to process a few million messages on a regular basis, and the new HPC solution serves to facilitate this,” says Manta.Improved Computational Power
The new HPC environment also helps the firm maximize performance through centralized application access, server consolidation, increased computing capacity, and reduced downtime. For example, BMO Capital Markets is using Windows HPC Server 2008 R2 to dynamically allocate to any task being performed intra-day or overnight. It also offloads the processing load from individual desktops, placing it into the computer grid. This speeds up both the processing and the local system, while ensuring proper controls.
“In our world, decisions have to be made in less than a split second. The number of computational models we run are in the thousands. Trading at the FX desk is easily in the [CAD]$100 to $200 million range in one trade, and it’s important that we use technology like Windows HPC Server to keep pace with all the risk analytics associated with the trades,” says Manta. Microsoft Server Product Portfolio
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