IBM makes stock trading faster

JAKARTA (JP): IBM announced yesterday it has developed a new technology that represents a significant leap forward in the speed and accuracy of one of the major analytical techniques used to support securities trading.

A spokesman for PT Usaha Sistem Informasi Jaya, the Indonesian distributor of IBM computers, said here yesterday that the new technology, called IBM Deterministic Simulation Blaster, is the result of more than a decade of research by IBM mathematicians and computer scientists.

The new technology is estimated to be up to thousands of times faster than the "Monte Carlo" simulation, which is the current technique used to calculate theoretical prices of mortgage-backed securities and complex derivatives.

"This is one of the most significant breakthroughs in trading analytics in many years," the spokesman quoted Robert Howe, general manager of IBM's Banking, Finance & Securities, as saying.

Traders currently use software to price their mortgage-backed securities and complex derivatives. At the heart of that software lies the Monte Carlo simulation. But because traders often have many securities to price, the process can take many hours and is rarely precise.

The IBM Deterministic Simulation Blaster allows securities firms to refine their own mathematical projections and determine a price that may put the traders at less risk.

The IBM Deterministic Simulation Blaster also allows traders to get important pricing information within seconds rather than hours. Traders will now be able to accurately price their entire inventory of investments as often as they like within the trading day, Howe said.

Traders can even have near-real time access to the 3-D information by using a high-performance parallel processing computer, such as the IBM RS/6000 Scalable POWER parallel System (RS/6000 SP).

The Simulation Blaster is designed to work with almost every computer system available today from personal computers to supercomputers. (31)