An Internet Multicast System for the Stock Market

We are moving toward a distributed, international, twenty-four hour, electronic stock exchange. The exchange will use the global Internet, or internet technology. This system is a natural application of multicast because there are a large number of receivers that should receive the same information simultaneously. The data requirements for the stock exchange are discussed. The current multicast protocols lack the reliability, fairness, and scalability needed in this application. We describe a distributed architecture together with a reliable multicast protocol, a modification of the RMP protocol, that has characteristics appropriate for this application. The architecture is used in three applications: In the first, we construct a unified stock ticker of the transactions that are being conducted on the various physical and electronic exchanges. Our objective is to deliver the the same combined ticker reliably and simultaneously to all receivers, anywhere in the world. In the second, we construct a unified sequence of buy and sell offers that are delivered to a single exchange or a collection of exchanges. Our objective is to give all traders the same fair access to an exchange independent of their relative distances to the exchange or the loss characteristics of the international network. In the third, we construct a distributed, electronic trading floor that can replace the current exchanges. This application uses the innovations from the first two applications to combine their fairness attributes.