London Stock Exchange speeds up

As volumes surge and competition between exchanges heats up, the London Stock Exchange has launched a new electronic trading system which promises to execute trades in 10 milliseconds. The $79.4 million dollar system, called TradElect, will clock in a 130 millisecond improvement over the previous 140 milliseconds it took for Europe's largest stock exchange to process an order. Speeding up execution time is critical for the LSE, as algorithmic modeling, which automatically generates trades, is growing in popularity and boosting volume. Algorithmic trades today account for about 40% of LSE's volume, according to market estimates. TradElect competition comes chiefly from the New York Stock Exchange, which is in the works of speeding up its own trades, and the Nasdaq Stock Market, which is buying Nordic bourse OMX AB to impose a more global footprint. On the day of the system's debut, volume at the LSE increased by about 6% for a typical Monday to nearly 471,000 trades, according to published reports. At the day's peak, there were 1,500 orders per second, or 900 more than the old system could handle.