Introduction to Tandem X.25 Capabilities

Stock Exchange Using SNAX/XF and OSI over X25AM
X25AM Implementations
3–8 065307 Tandem Computers Incorporated
Stock Exchange Using
SNAX/XF and OSI over
X25AM
A large stock exchange in Europe uses Tandem systems and X25AM for an online
trading and information system that gives brokers quick and efficient access to a
growing securities market.
The Tandem system automatically matches buy and sell orders whenever price,
volume, and other conditions are met. The automated exchange application lets the
brokers conceal some of the volume of a bid by simply specifying an open quantity
when entering an order. The actual quantity traded is recorded by the system when
the order is filled.
Before the start of trading each morning, all pending orders are loaded into the
Tandem system. At this time, a broker can only see his or her own orders. After the
orders have been loaded, a matching routine begins, which continues until no further
matches are possible. The automated exchange then displays the opening price for
each stock, the number of trades made at this price, and any remaining orders—all in
time for the market to open for regular trading.
To help facilitate trading, the Tandem system provides a constant stream of
up-to-the-second, vital information to the broker, such as a market summary,
electronic order book, listing of completed trades, index information, and various
types of reports.
The daily market summary shows the highest bid price, volume at the highest bid,
lowest asking price, volume at the lowest ask, latest paid, and highest paid stock. Each
broker’s order book lists prices, codes for other brokers, and volumes for pending
orders, as well as quantities for any open-ended orders the broker has made. The
quantities of open-ended orders made by the broker are not revealed to the rest of the
exchange.
The automated exchange system is also used for electronic mail—including
time-critical messages—broadcast by the exchange to all its members, and for
receiving updates from foreign and domestic securities markets or the latest financial
news. Brokers also have access to a historical database stored on another mainframe,
which contains daily trading information from the past three years for each type of
stock.
The main automated exchange application runs on a NonStop system that supports
150 workstations used by brokers, managers, and other bank-office personnel.
The workstations are connected to the main application over a packet-switching
network using X25AM for the lower-level protocol functions, and either OSI or
SNAX/XF for the upper-layer functions (Figure 3-4). Each PC includes a customized
X.25 board (an Eicon card) to facilitate X.25 communications. Almost all
transaction-processing occurs online, with only a few, small, overnight batch runs used
for general file maintenance.