Appro Slings Overclocked Server for High Frequency Traders

By Michael Feldman

October 12, 2010

HPC cluster maker Appro has unveiled the HF1 server, a purpose-built box aimed at the high frequency trading business. The new server incorporates overclocked Intel Xeon “Westmere” CPUs and a self-contained liquid cooling system to deliver the best dual-socket performance this side of a tricked-out gaming machine. Although the risky design isn’t geared for mainstream HPC users, for high frequency traders, it may be just the kind of gamble they are comfortable with.

The multi-billion dollar business of high frequency trading (HFT) is based on a special variant of algorithmic trading, wherein high-powered computers are hooked up to low-latency market feeds, in order to execute lightening fast trades. Typical participants include investment banks, hedge funds, and proprietary HFT firms who specialize in this type of operation. The general idea is to slice small profits from each trade by anticipating pricing ahead of other investors. To make a profit, though, many trades have to be executed on a daily basis, so a typical asset is only held for a very short time. This requires extremely fast networks and even faster computers.

For HFT, the performance of the network ultimately limits the speed of trading, but as network latency drives toward zero, the playing field has become more even. Now HFT’ers are looking to what goes on inside the server boxes to get their competitive edge. One way to speed up the software that decides which trades to make is to make the processors themselves faster. Unfortunately, CPU clock frequencies have been in a holding pattern for several years, thanks to the physical limitations of semiconductor transistors.

Today, a top bin x86 processor will flirt with 3.5 GHz. That’s plenty fast if you can scale your application to take advantage of more cores and processors — the way most of HPC works. In that case, you’re able to crank up execution speed by throwing more servers at the problem. HFT applications, though, require fast single-threaded performance.

According to John Lee, vice president of Appro’s Advanced Technology Solutions Group, a small number of financial services customers convinced the HPC vendor to build overclocked x86 servers designed specifically for the high frequency trading domain. Although these customers are in line to get the first hardware when it hits the streets later this year, Lee thinks all the HFT players will want to take a hard look at the new HF1. “It’s a product they can’t buy right now because there is nobody addressing the special needs these guys have,” he says.

The server is a dual-socket box using Intel Xeon X5680 processors overclocked to frequencies up to 4.4 GHz. That’s nearly a full gigahertz quicker than the top bin 3.46 GHz Xeon X5677 available today, and even outruns the fastest speeds supported by Intel’s turbo boost technology. To keep the overclocked CPUs cool and collected, Appro has plumbed the server with a closed-loop cooling system (pump, coolant reservoir, pipes and radiator) to draw the extra heat away from the over-achieving chips. “We’re taking the soul of a gaming machine and packaging it in a commercial rackmount server,” explains Lee.

The makes for a rather unconventional HPC machine. All the internal plumbing expands what would have been a 1U server into a 3U box. And because of the overclocking and extra plumbing, a lot more power is required — in the neighborhood of 1 kilowatt. That’s fine for HFT set-ups since speed, not density or power, is the driving consideration.

A bigger concern is the short warranty period. Most Appro servers come with a standard three-year warranty, but for the HF1 that’s reduced to just a single year. More importantly, the processors are only guaranteed for 30 days since the overclocking voids the Intel warranty on their chips. Lee says they are offering a one or two year warranty extension for the HF1, but at an additional premium.

Although Intel is not guaranteeing the overclocked processors, it is cheering Appro on and is certainly keeping an eye on the lucrative HFT market. It’s not too big a stretch to imagine that the chipmaker would want some of the action by offering faster clocks in its mainline Xeons. Whether this would take the form of faster CPUs with fewer cores (maybe just one?), or some exotic technology that allows the frequencies to breeze past 3.5 GHz is unknown. Almost certainly, the presence of 4-plus GHz Xeons would entice Tier 1 OEMs and others to build purpose-built HFT boxes. But at least for the time being, Appro is alone in the fast lane.

Not without some risk, though. The up-front cost of an HF1 puts these servers in a class by themselves, price-wise. Given that these systems have to be hand-tuned to balance the clocking on the various motherboard components, the premium is quite steep.

Although Appro is not publicizing its pricing, Lee implied the HF1 would cost several times that of a standard $4,000 or $5,000 HPC server. Ordered in quantity, Appro would no doubt offer better deals, but even the largest deployments would be just a few hundred units, so this solution is only for the DEEP-pocketed.

The five-figure pricing and short warranty eliminates this server from consideration for the typical HPC user. A DOE lab, for example, would love to have the faster CPUs for its supercomputers, but the per unit costs are too high for a multi-thousand node machine. And in any case, by the time a lab ran a system through acceptance testing, the processors’ warranty would already have expired.

Unlike the other HPC domains, in high frequency trading, server costs are a relatively small piece of the operation, especially considering the money that can be generated from these machines. A 2009 report by the TABB Group estimated that HFT generated about $21 billion in profits in 2008 (that’s profit, not revenue). If a single server can slip in, say, twice as many trades in the same timeframe as its slower competition, the ROI is quite rapid. From conversations Lee has had with HFT customers, they’re confident the cost of these machines can be recouped within the first few months of operation. According to him, when the subject of server cost comes up, “nobody bats an eye.”

Subscribe to HPCwire's Weekly Update!

Be the most informed person in the room! Stay ahead of the tech trends with industy updates delivered to you every week!

InfiniBand Still Tops in Supercomputing

July 19, 2018

In the competitive global HPC landscape, system and processor vendors, nations and end user sites certainly get a lot of attention--deservedly so--but more than ever, the network plays a crucial role. While fast, perform Read more…

By Tiffany Trader

HPC for Life: Genomics, Brain Research, and Beyond

July 19, 2018

During the past few decades, the life sciences have witnessed one landmark discovery after another with the aid of HPC, paving the way toward a new era of personalized treatments based on an individual’s genetic makeup Read more…

By Warren Froelich

WCRP’s New Strategic Plan for Climate Research Highlights the Importance of HPC

July 19, 2018

As climate modeling increasingly leverages exascale computing and researchers warn of an impending computing gap in climate research, the World Climate Research Programme (WCRP) is developing its new Strategic Plan – and high-performance computing is slated to play a critical role. Read more…

By Oliver Peckham

HPE Extreme Performance Solutions

Introducing the First Integrated System Management Software for HPC Clusters from HPE

How do you manage your complex, growing cluster environments? Answer that big challenge with the new HPC cluster management solution: HPE Performance Cluster Manager. Read more…

IBM Accelerated Insights

Are Your Software Licenses Impeding Your Productivity?

In my previous article, Improving chip yield rates with cognitive manufacturing, I highlighted the costs associated with semiconductor manufacturing, and how cognitive methods can yield benefits in both design and manufacture.  Read more…

U.S. Exascale Computing Project Releases Software Technology Progress Report

July 19, 2018

As is often noted the race to exascale computing isn’t just about hardware. This week the U.S. Exascale Computing Project (ECP) released its latest Software Technology (ST) Capability Assessment Report detailing progress so far. Read more…

By John Russell

InfiniBand Still Tops in Supercomputing

July 19, 2018

In the competitive global HPC landscape, system and processor vendors, nations and end user sites certainly get a lot of attention--deservedly so--but more than Read more…

By Tiffany Trader

HPC for Life: Genomics, Brain Research, and Beyond

July 19, 2018

During the past few decades, the life sciences have witnessed one landmark discovery after another with the aid of HPC, paving the way toward a new era of perso Read more…

By Warren Froelich

D-Wave Breaks New Ground in Quantum Simulation

July 16, 2018

Last Friday D-Wave scientists and colleagues published work in Science which they say represents the first fulfillment of Richard Feynman’s 1982 notion that Read more…

By John Russell

AI Thought Leaders on Capitol Hill

July 14, 2018

On Thursday, July 12, the House Committee on Science, Space, and Technology heard from four academic and industry leaders – representatives from Berkeley Lab, Argonne Lab, GE Global Research and Carnegie Mellon University – on the opportunities springing from the intersection of machine learning and advanced-scale computing. Read more…

By Tiffany Trader

HPC Serves as a ‘Rosetta Stone’ for the Information Age

July 12, 2018

In an age defined and transformed by its data, several large-scale scientific instruments around the globe might be viewed as a ‘mother lode’ of precious data. With names seemingly created for a ‘techno-speak’ glossary, these interferometers, cyclotrons, sequencers, solenoids, satellite altimeters, and cryo-electron microscopes are churning out data in previously unthinkable and seemingly incomprehensible quantities -- billions, trillions and quadrillions of bits and bytes of electro-magnetic code. Read more…

By Warren Froelich

Tsinghua Powers Through ISC18 Field

July 10, 2018

Tsinghua University topped all other competitors at the ISC18 Student Cluster Competition with an overall score of 88.43 out of 100. This gives Tsinghua their s Read more…

By Dan Olds

HPE, EPFL Launch Blue Brain 5 Supercomputer

July 10, 2018

HPE and the Ecole Polytechnique Federale de Lausannne (EPFL) Blue Brain Project yesterday introduced Blue Brain 5, a new supercomputer built by HPE, which displ Read more…

By John Russell

Pumping New Life into HPC Clusters, the Case for Liquid Cooling

July 10, 2018

High Performance Computing (HPC) faces some daunting challenges in the coming years as traditional, industry-standard systems push the boundaries of data center Read more…

By Scott Tease

Leading Solution Providers

SC17 Booth Video Tours Playlist

Altair @ SC17

Altair

AMD @ SC17

AMD

ASRock Rack @ SC17

ASRock Rack

CEJN @ SC17

CEJN

DDN Storage @ SC17

DDN Storage

Huawei @ SC17

Huawei

IBM @ SC17

IBM

IBM Power Systems @ SC17

IBM Power Systems

Intel @ SC17

Intel

Lenovo @ SC17

Lenovo

Mellanox Technologies @ SC17

Mellanox Technologies

Microsoft @ SC17

Microsoft

Penguin Computing @ SC17

Penguin Computing

Pure Storage @ SC17

Pure Storage

Supericro @ SC17

Supericro

Tyan @ SC17

Tyan

Univa @ SC17

Univa

  • arrow
  • Click Here for More Headlines
  • arrow
Do NOT follow this link or you will be banned from the site!
Share This