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"After delving into the capabilities of the Azul platform, it became clear that the platform offered the best solution to reduce risk for our clients and provide the long term scalability to support our business objectives." - Chuck Doerr, CTO of Creditex

INDUSTRY

Financial Services

CHALLENGE

Eliminate garbage collection pauses to provide certainty of execution, which has become a critical issue in the high-growth, volatile CDS trading market.

SOLUTION

The Azul solution provides higher efficiency and unprecedented performance.

BUSINESS BENEFITS

Predictable response times
Automated scalability
Far greater throughput
5x the usable memory of other Java platforms

Azul Compute Appliances allow CreditEx to maintain consistent, robust performance

Creditex's leadership in electronic and electronic assisted execution (hybrid) creates unique Java processing requirements. With electronic and hybrid trading there is a need to remove human intervention from workflow because of increased volume, higher throughput, and lower cost per transaction requirements. Java applications to support transaction processing have stringent Quality of Service requirements, and are characterized by multiple event logic processing.

Creditex Group, Inc. (Creditex) operates a hybrid model of voice and electronic execution, and was the first to successfully launch electronic trading for Credit Default Swaps (CDS) in 2004. Creditex has maintained its leadership position in electronic trading and successfully launched several anonymous electronic execution products, such as VolumeClearing™, in North America, Europe and Asia. In addition to its core execution business, Creditex has two operating subsidiaries, TZero and Q-WIXX, which provide additional electronic processing and execution services in the CDS space.

IntercontinentalExchange (NYSE: ICE), a leading operator of global derivatives exchanges and over-the-counter (OTC) markets, recently entered into a definitive agreement to acquire Creditex.

CDS trading is one of the fastest growing over-the-counter markets, with 95% CAGR from 2004 to 2008. Creditex's RealTime™ platform is widely regarded as the best in the industry and is currently used globally by over 1000 traders at the largest dealers. The RealTime platform has executed over $5 trillion in notional value of CDS transactions since introduction. To support future growth, the Creditex RealTime platform adopted Azul Systems hardware.

High Volumes and Volatility Drive Technical Leadership

Over the past decade, the derivatives market has been the beneficiary of the ability to better match buyers and sellers. However, when trading volumes and volatility increase exponentially as they have in recent years, certainty of execution becomes a crucial issue. This problem is more relevant because in volatile markets, the potential loss of not acknowledging and confirming trades is greater.

Creditex's leadership in electronic and electronic assisted execution (hybrid) creates unique Java processing requirements. With electronic and hybrid trading there is a need to remove human intervention from workflow because of increased volume, higher throughput, and lower cost per transaction requirements. Java applications to support transaction processing have stringent Quality of Service requirements, and are characterized by multiple event logic processing.

  • Guaranteed throughput is essential, and is governed by protocols, service levels, and event propagation.
  • Application performance must not be affected by unpredictable loading or garbage collection pauses
  • Resource Allocation for Diverse Workloads—Transactions and events requiring very low latency should not be delayed by having to wait for the processing of long running transactions.

Creditex determined that to extend its leadership in transaction processing they would have to eliminate application pauses due to the garbage collection process, a characteristic drawback inherent to Java-based applications. This process is required to reclaim memory for reuse, otherwise pauses lasting from many milliseconds to several seconds can occur and, in worst-case scenarios, pauses lasting minutes can occur. Creditex believed that the right solution was not just reducing GC pauses, but eliminating them completely. By doing so they could rely on their platform to perform across an even wider range of trading and user conditions.

After investigating several products on the market and various internal options, the company ultimately selected Azul Systems Vega Series Compute Appliance.

"After delving into the capabilities of the Azul platform, it became clear that the platform offered the best solution to reduce risk for our clients and provide the long term scalability to support our business objectives," said Chuck Doerr, CTO of Creditex.

Azul Systems Provides Creditex with Scalable Derivatives Trading Platform

The unique capabilities of Azul Compute Appliances enabled Creditex applications to achieve consistently high performance, with few changes to the application code and no changes to the architecture.

Unlike other options, the Azul Compute Appliance provides Creditex with the scalability to access up to 864 processor cores and 768GB of memory within a single Compute Appliance. This provides Creditex a software and hardware assisted platform that enables its credit derivatives applications to transparently tap into virtually unlimited capacity over the network. The result is unmatched levels of performance, scalability, throughput, and reliability to support Creditex's business objectives.

The Azul Compute Appliance directly addressed Creditex's drive to extend their industry leadership in electronic and hybrid execution by delivering breakthrough capabilities:

  • Predictable Response Times: Pauseless GC removed the possibility of "dead time" experienced in Java applications. As a result, unpredictability in execution times was removed and tighter SLAs became achievable
  • Automated Scalability: Azul's Compute Pool Manager automatically balances available resources to workload changes every 10 milliseconds.
  • Far Greater Throughput: The Azul Compute Appliance's "optimistic thread concurrency" avoids thread contention within a process, which can execute hundreds of parallel threads.
  • 5X the Useable Memory: With GC pauses no longer an issue, the current 2GB memory upper limit on Java applications was raised to 10GB (higher if needed). This vastly simplifies system management while improving overall performance.

Initially, Creditex ran Azul Compute Appliances in a pilot environment before switching over to production. In full production mode, the Azul system easily supported over 800 users, and is capable of scaling much higher without any code or infrastructure changes.

Creditex Extends Leadership and Improves Customer Service

Since deploying the Azul solution, Creditex has been able to achieve consistent, robust performance and scalability within their core trading engine, even under high transaction workloads.

Pauses due to garbage collection have completely disappeared. They have also been able to increase heap memory size to 10GB, where the previous limit was at 2GB heap sizes. This has allowed Creditex to achieve at least a 50% improvement in performance on a roundtrip transaction time basis.

Further, this enabled Creditex to offer capabilities that alternative systems could not support, such as allowing customers to hold and process several million trading positions in memory at once.

Azul's support for resource partitioning has also enabled Creditex to avoid the costs of purchasing additional compute capacity and allows them to use partitioning to free up existing resources.

In production, Creditex is benefiting from Azul's Real Time Performance Monitor (RTPM), a diagnostics and tuning tool that offers a uniquely detailed view of the real-time activity of both the application and the underlying VM. With RTPM, Creditex developers are able to utilize real-time capabilities to quickly pinpoint and fix issues without having to restart or reboot the application, while avoiding end-user downtime. This tool has been instrumental in improving responsiveness to customer issues.


Given the positive results so far, Creditex expects to expand the use of the Azul solution beyond their core trading applications."We are impressed with the results we have achieved so far with the Azul platform," says Chuck Doerr. "Azul offers a comprehensive solution that truly delivers higher efficiency and maximum performance value from Java-based trading applications. Not only is their technology solid, we have also been very pleased with the responsiveness and depth of the engineering support through the entire process."

For more information on this and other success stories using Azul technology, please contact sales@azulsystems.com.