OPRA Increases SIAC Capacity

The Options Price Reporting Authority will increase the capacity of the Securities Industry Automation Corp. options datafeed on Sept. 10 to handle 75,000 messages per second, Inside Market Data has learned.

The SIAC datafeed provides options data from all US options exchanges. It currently has a capacity of 52,000 mps.

OPRA decided to increase the feed’s capacity because of traffic expectations by member participants, says Joseph Corrigan, executive director of OPRA. Options exchanges submit traffic projections to OPRA as part of a recently implemented capacity planning process.

The SIAC capacity upgrade was initially planned for August, Corrigan says. However, some datafeed recipients are currently converting from IP multicasting technology to the Secure Financial Transactions Infrastructure, and OPRA is waiting until that transition is complete so that users are not affected. SFTI is SIAC’s secure network by which firms access market data (IMD, May 19, 2003).

The increase in capacity for the SIAC feed reflects an overall rise in options data volume. Total options messaging traffic is expected to increase to 82,000 mps by January 2005 and to 94,000 mps by next July, according to Corrigan.

Corrigan says the high messaging traffic and exchange volume are in large part due to an increase in automated trades. He adds that as exchanges implement new quoting models, such as the Chicago Board Options Exchange’s hybrid trading system, volume levels will remain high.

In fact, due to the increased volumes, OPRA expanded its hardware capacity earlier this summer to handle the increase in messaging traffic. For instance, the one-minute peak soared from 15,715 mps on Sept. 30, 2003 to 28,315 mps on May 4 of this year, according to Corrigan. Capacity was raised to 52,000 mps on July 9.

Meanwhile, the Financial Information Forum continues to keep a close eye on options volume. Most recently, it formed a working group to specifically address issues associated with options volume (IMD, Aug. 9).

Jeff Wells, chairman of the FIF’s market data capacity committee, says, "We are trying to find some sort of way to demonstrate that we as a group are concerned about it." He says the working group is still discussing what action to take, but it may write a letter to the options exchanges describing the FIF’s concerns.

For example, while OPRA and the exchanges are carrying out options data mitigation strategies, Wells says that according to those on the receiving end of the data, this is not enough. "We need much more mitigation. The more data they send out on the quote side, the less meaningful it becomes."

He adds, "I don’t think any vendor would welcome the idea of having so many quotes in the options market [because] the overall amount of money that you have to spend on dealing with the options market is out of kilter with the number of end users."

OPRA manages options data from all of the US options exchanges, including the American Stock Exchange, Boston Stock Exchange, CBOE, International Securities Exchange, Pacific Exchange and Philadelphia Stock Exchange.