Newsletter sign-up

View all newsletters

Sign up for our technology specific newsletters.

Enterprise Java

Email Address:

Why ETrade banks on Java to keep bulls and bears in line

Java adds high-availability and reliability to online trading infrastructure

By Barry D. Bowen, JavaWorld.com, 06/01/98

Bears and bulls wreak havoc on Wall Street, so imagine the chaos they create when storming the information highway. At San Francisco-based ETrade's Mutual Fund Center, keeping the animals in well-ordered queues is a formidable task now entrusted to Java.

Online trading rose 44 percent between the first quarter of 1997 and the close of the third quarter, as service providers slashed commissions and saw their own firms' stock values increase 50 percent in the third quarter alone. As online trading firms jockeyed for position, the lure of the Internet and lower commissions continued to attract more customers from traditional brokerages and boost online demand.

The problem for the online trading industry was clearly demonstrated in late October 1997, when trading firms were caught generally flat-footed by more than 200,000 online trades placed in response to a sharp market downturn. That is significantly higher than the 138,000 trades-per-day third-quarter average, and obviously does not include traders locked out by overloaded systems. While stock prices quickly rebounded, the online trading firms were left with the long-term task of repairing customer relations and shoring up systems that sagged or buckled under the load.

Shoring up 'Net-based trading infrastructures is crucial because online traders now garner 30 percent of all the brokerage fees in the discount trading industry, and only 5 percent of all retail brokerage fees. In short, there is plenty of room to grow, and a lot of motivation for both consumers and service providers to facilitate a continued shift to online trading.

Using Java and Kiva to tame the beasts

Long before the events of late October underscored the entire online trading market's need to beef up its trading infrastructures, ETrade Securities Inc. began addressing this need. The firm had already looked at its options, worked furiously for a few months, and rolled out its "Mutual Fund Center" in mid-November. The infrastructure relies heavily on Java and uses the Java-based Kiva Enterprise Server. (Following this deployment, Netscape Communications completed its acquisition of Kiva Software, so the third-party technology now belongs to the Mountain View maven of Web browsers and servers.)

ETrade's Mutual Fund Center supports more than 3,500 funds, provides tools for assisting users in conducting research (historical charting, comparative performance charting, price quotations, and so on) and placing trades. ETrade provides its own full-service back-end trade processing center.

Why Java

Pick your favorite buzzword -- scalability, reliability, maintainability, ease-of-deployment -- the senior technical folks at ETrade will tell you that is why they opened their checkbooks and bought Kiva. Regardless of Kiva's Java-based internals, ETrade had the option of writing its Kiva "App Logic" components in either C++ or Java. It chose Java, says Tim Fleming, vice president of technical planning and development for ETrade, in spite of the expectation that Java would execute more slowly than compiled C++ code. The upside, says Fleming, was twofold: He could much more easily find quality Java programmers, and Java was the better direction for long-term technical investments.

 

About Us | Advertise | Contact Us | Terms of Service/Privacy

Copyright, 2006-2008 Network World, Inc. All rights reserved.