Systems merger of the board and mercantile no small task

CME Group Inc.'s technology departments -- about half its staff -- will be working weekends even through the holidays to bring the merged Chicago Board of Trade and Chicago Mercantile Exchange under one computer system by spring.

Although traders say they seldom notice the technology staff except when panic sets in after a trading screen freezes,CME has spent about $1 billion on technology over the past 10 years, and it had about 700 employees with technology-related jobs before its July merger, according to company officials.

The number of jobs will rise slightly through the spring to help consummate the merger. By the end of the integration, CME expects to cut 400 jobs, or 20 percent, from its overall staff. Spokeswoman Mary Haffenberg declined to clarify how many of those will be technology-related.

But for now the focus of the technology departments is merging systems, integrating staffs and keeping up regular work without giving traders an excuse to stop trading. The one-time rival exchanges are getting on well as the need to keep money moving and a passion for technology draw them together, company department heads said.

"Our big thing here is our markets are sacred," said Palatine resident Mark Ainis, a director of front-end systems technology at CME. "Every group's responsibility is to make sure we have performing systems."

The big challenges will be moving all traders from the Board of Trade's electronic trading system to the CME Globex electronic trading platform over two weeks in January and then relocating the technology that accompanies the trading floors to the Board of Trade building over several months in the spring.

"There's going to be a lot of retraining," said Ramon Paxton, a Board of Trade trader. "There's going to need to be more synergy between the traders and the IT department."

There already is more synergy than most traders might expect. Much of the technology staff consists of former clerks and traders, technology department heads said.

It's a tight-knit group bound together by geekiness and long weekends at the office with fantasy football and games of darts, after hours, of course, said Minooka resident Michael Duff, also a director of front-end systems technology.

The technology teams already have boxed up their offices and moved in together at the Merc six blocks from the Board of Trade, although people in floor operations will stay with the pits at each exchange. The technology and systems behind the two exchanges are fairly similar because they shared so many customers and had to stay competitive, said Chicagoan Mark LaPedes, director of the Globex Control Center.

"It's matched up beautifully," LaPedes said. "It's a very small community and we speak the same language. It's amazing to me how similar we all are. You have to have a real thirst for knowledge."

Some of the department heads said they expected more of a clash.

The technology departments monitor trading, provide customer support, develop and test new products and isolate and fix technical problems. They try to cut milliseconds from trade processing times, and when a trader's computer goes down, the technology staff is on the floor.

Constantly adapting to and developing new technologies is a passion, Duff said. It's like constructing a rocket ship, with each team or person problem solving and putting together specialized bits of code and expertise.

"Building something brand new that rocks is very exciting," Duff said.

LaPedes said a good day is hitting record volume and watching the system hold strong, green and not red text on the screens in the Globex Control Center.

But screens do go red and it does get stressful as members of the control center man phones and try to problem-solve while monitoring up to 12 screens at a time.

"There's a lot of ebb and flow," Duff said. "Whenever (Federal Reserve Chairman Ben) Bernanke opens his mouth, everything goes crazy."

The merger is adding to the drama, but the exciting challenges and changes drive much of the staff, according to department heads.

Mostly it's the little things that are frustrating people, the they say. For example, Board of Trade employees have to give up checking private e-mail at work because the Mercantile Exchange bans it for security reasons.

"Yes there are challenges and there's a lot of stuff to do," Duff said. "But it's fun. Geeks tend to thrive on this stuff."

Flurry of trades

"We should all be glowing from all the electrons around here." Michael Duff, director of front-end systems technology at CME Group Inc.

Here is a taste of how much activity the tech experts at Chicago's exchanges have to deal with.

• 40 to 60 trades are processed per second on average.

• 2,000 to 3,000 trades are processed per second at peak trading.

• It takes 30 milliseconds for the average trade to go roundtrip through the system.

• 2.5 milliseconds is the time it takes a mass quote message to go through.

• About $1 billion has been spent on CME technology over the past 10 years.

• CME has 240 terabytes of data storage. It would take a 10-mile stack of paper used on both sides to print one terabyte of information.

Source: CME Group