CBOT signs on for Radianz services

The network service will replace CBOT’s current serial-fed network and allow it to provide additional data services and cope with growing volumes, officials say. The main difference to end users will be the addition of greater market depth on more electronic products.

The new network will also be able to distribute data products that are currently only available via file transfer protocol (FTP) services such as Liquidity Data Bank. The new service describes what type of trader traded what product at what price and at what time. In addition, it notes whether the type of trader as a group was net long or net short. CBOT will also begin to distribute certain statistical information over the new network.

CBOT will also introduce multicast groups, which are similar to data channels. The groups divide the data into different categories, such as e-CBOT, e-CBOT market depth, open outcry and Dow Jones Indexes. This allows vendors to pick and choose the data they want to redistribute.CBOT considered seven other providers: Savvis, AT&T, SBC, MCI Worldcom, XO, Focal and Nextera One.

The exchange had three criteria for choosing the vendor, says Steven Dickey, vice president of market data products and information at CBOT. The first was the need for technology that could accommodate the general increase in volume as well as the additional data that will be generated by the distribution of every tick through the Liffe Connect platform, which CBOT will begin to use in January 2004.

The second element was pricing. "Larger bandwidth would naturally cost more ... [but] the increased cost to quote vendors is minimal," Dickey says.

The third criterion was strategic. "Over half of our existing vendors are connected to the Radianz network," Dickey says. CBOT has about 60 market data vendor connections.

The agreement is exclusive, so those not on the Radianz network must sign up to it, says Brennan Carley, chief product and technology officer at Radianz.

Quote vendors are due to send in their orders for circuits by May 1, with the installation of circuits at the vendors set for July. CBOT will test the new network starting in July with a live date of Oct. 1.

At that time, the new network will begin to distribute open outcry and Dow Jones Index data, while market data from the a/c/e trading platform will continue to be carried on the old network. In January 2004, the old network will be switched off and data from the new electronic trading platform, e-CBOT, will replace the a/c/e data.