Panthera Capital’s CFD Trading Platform Achieves Improved Reliability, Performance, and Scalability After Migration to Red Hat Solutions

May 13, 2011

To migrate a legacy CFD (contracts for difference) trading platform from IBM WebSphere Application Server running on Sun Solaris, Panthera Capital transitioned to a more affordable, clustered infrastructure based on JBoss® Enterprise Application Platform and Red Hat® Enterprise Linux®.

Customer: Panthera Capital AG

Achieved rapid (near real-time) response times; increased availability and stability; achieved excellent scalability and security

Geography: EMEA
Country: Germany


Business Challenge:

To migrate a legacy CFD (contracts for difference) trading platform from IBM WebSphere Application Server running on Sun Solaris to a more affordable, clustered infrastructure based on JBoss® Enterprise Application Platform and Red Hat® Enterprise Linux®

Migration Path:

IBM WebSphere Application Server running on Sun Solaris to JBoss Enterprise Application Platform and Red Hat Enterprise Linux

Solution:

Red Hat Enterprise Linux, JBoss Enterprise Application Platform

Software:

Red Hat Enterprise Linux, JBoss Enterprise Application Platform

Hardware:

Clustered environment based on standard x86 servers

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Background:

Based in Frankfurt, Germany, Panthera Capital AG (Panthera) operates for its sister CeFDex AG an innovative, full-service business-to-business (B2B) trading platform for financial CFDs (contracts for difference). These CFDs allow investors to speculate on the rising or falling price of an underlying asset (shares, market indices, currencies, bonds, etc.). In the most basic terms, anything that has a market price can also be traded with a contract of difference. Holding periods range from a few minutes to several hours or even longer. These types of CFD transactions are an increasingly popular investment product because large sums can be moved by leveraging relatively small amounts of capital resources. Users of the Panthera trading platform include online brokers and financial services providers who can access the CFD application via their banks’ portals. Panthera offers development, hosting, professional, and consulting services. These services include consulting around launches of a CFD platform in a complex market environment, as well as guiding integration with existing customer systems (e.g., banks). Panthera also serves as a specialist for booking transactions and managing accounts, as it seamlessly links the CFD platform with the existing business processes of banks, financial services providers, and brokers. The platform is branded for a bank or a financial service provider but operated by Panthera. For investors, this means that they operate in an environment with a familiar look and feel.

Business Challenge:

Panthera launched the development of its CFD trading platform in 2007. Initially, IBM WebSphere Application Server, which ran on Sun Solaris, was used as the commercial runtime environment for the Java application. Over time, however, it became clear that the license costs for the software had increased dramatically as the number of users grew, also leading to issues related to scalability. Panthera’s management team and IT division quickly agreed that they wanted to move away from a proprietary solution toward an open source environment, encompassing everything from the operating system and the database (PostgreSQL from EnterpriseDB) to the application server. After evaluating a number of different products, the Red Hat Enterprise Linux operating system and JBoss Enterprise Application Platform were selected as the best solutions.

“The main criteria in the selection process included high availability, stability, scalability, and security,” said Christoph Reeber, head of IT at Panthera Capital AG. “We needed extremely reliable components for the sophisticated, mission-critical CFD platform.”

For the actual migration of the platform to the new open source environment, Panthera brought in help from Munich-based LinuxLand International, a Red Hat Advanced Partner. Since 1996, LinuxLand International has offered IT business consulting services to major, well-known corporations. The company is a one-stop solution provider, offering everything from strategic consulting to implementation, backed by a reliable project management team.

LinuxLand’s extensive experience with open source software proved extremely useful, particularly when it came to the detailed testing of how the various hardware, operating system, and application components would interact, in addition to finding the right combination of modules that worked together well.

Before the migration, Panthera had little in-house expertise in open source software. Following an extensive knowledge-transfer period, which encompassed general preparations, setup, and extensive testing, Panthera is now in a position where it can manage and operate the application itself.

Solution:

The CFD trading platform is deployed in a clustered environment based on standard x86 servers in order to meet the needs for fast, near real-time response times, as well as the demands posed by the constant growth in the number of users. The environment is implemented as an integrated, high-performance cluster solution that offers a highly available single-system image (SSI) environment for Red Hat Enterprise Linux.

On the client side, the CFD platform is platform-independent and does not require any additional software. Customers of online brokers and financial service providers simply need a browser to log into their banks’ portals where they can place orders for CFDs. Investors are then seamlessly transferred to the CFD platform, and the user interface mirrors an application created by their banks. Once the investors work on the CFD platform, they can access all of the major US and European stock markets. This allows investors to do business within a 15-hour-per-day time slot. Panthera's goal is to expand this to a 24-hour time slot.

The security protocol used by the platform employs the latest authentication technologies for the firewall, as well as encryption and certification. This in turn ensures the confidentiality of a customer’s transaction and provides protection for his/her personal accounts. In addition, the customer’s data remains at the investor’s bank. For banks and other financial services providers this means that they use professional services, as well as the stable and sophisticated technology of the CFD platform, while protecting their customer data from outside access.

Benefits:

Red Hat solutions enable Panthera to offer online brokers and financial services providers a CFD platform in an ultra-modern trading environment, specially adapted to each customer’s system environment. Customers of Panthera receive all the benefits of stable, sophisticated technology, with included professional services. The new CFD platform strengthens Panthera’s role as a specialist for transaction booking and account management in a complex field of business.

In addition, Panthera creates a seamless link between the internal CFD trading platform and the established business processes of financial services providers with the look and feel of their corporate designs. With this approach, Panthera establishes a customized front-end combined with an open source based back end. Thus Panthera is in the position to focus on its core competences in trading (market-making), IT (electronic trading platforms, back office systems), and services (sales, marketing, training, legal, and compliance).

“The new CFD platform has been in production for several months now, and it has lived up to all of our expectations,” said Reeber. “The open source software solution combining Red Hat Enterprise Linux and JBoss Enterprise Middleware offers us a stable and scalable platform that can be managed very cost-efficiently. It also allows us to operate the CFD trading platform securely and without any around-the-clock downtime. A major bonus for us is the high level of flexibility and independence that we have achieved.”

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