Cboe’s CEO is highlighting the limits of the cloud even as Nasdaq says it’s on board

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Traders trade VIX contracts at the Cboe Global Markets exchange (previously referred to as CBOE Holdings, Inc.) on December 19, 2017 in Chicago, Illinois. Last week the exchange became the first in the Unites States to begin trading Bitcoin futures. Bitcoin prices have surged in the past year, going from $1,000 a coin at the beginning of the year to a recent high of around $20,000. (Photo by )

  • Cboe Global Market’s CEO Edward Tilly said he sees the benefit in moving the exchange’s data to the cloud.
  • However, Tilly raised issue with moving the entire venue to the cloud, citing the tech’s inability to keep up with the speed needed to match trades.
  • Nasdaq CEO Adena Friedman recently threw her support behind the cloud, and said she sees exchanges moving to the tech over the next next decade.

Exchanges, like banks and hedge funds, are among those on Wall Street starting to see the benefit of moving part of their operations to the public cloud. But venues migrating their entire infrastructure to the technology still seems like a pipe dream to some.

Edward Tilly, Cboe Global Markets CEO, told Business Insider in an interview that while he sees the benefit of moving his exchange group’s data into the cloud, shifting other parts of the trading venue off premise could be a tough sell.

Specifically, he said moving the exchange’s matching engine, which links buyers and sellers of assets, would be difficult.

“I scratch my head on matching. At this point, it seems very aspirational. That doesn’t mean it’s a bad thing,” Tilly said. “Data, I totally get that. But matching, I think that might be a little bit of a stretch.”

Read more: JPMorgan is building a cloud engineering hub in Seattle minutes away from Amazon and Microsoft, and it’s planning to hire 50 staffers this year

Nasdaq CEO Adena Friedman recently said she sees exchanges moving to the cloud over the course of the next decade. As a result, Friedman said the markets could operate more holistically as opposed to each exchange operating in their own data centers, separated from each other.

The issue with using the cloud to match trades lies in the speed at which the the remote servers could handle the orders. Cloud-based service has more latency than on-premise hardware, said Bryan Harkins, the co-head of markets division at Cboe.  In the stock market, where fractions of a second are the difference between millions of dollars in profits, the lag from using the cloud would be disruptive. 

Read more: Nasdaq’s CEO just threw her support behind the cloud and she hopes to eventually move the exchange there

As for if Cboe has any plans in place to move data to the cloud, Tilly declined to comment beyond reiterating his belief in where he sees the potential benefits in data storage. Harkins added that the path towards using cloud technology around managing data is much clearer. 

“Storage, yea, you can certainly cut out a lot of expenses by moving all of your data infrastructure to the cloud,” Harkins said.

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