Using Parallel Processing

Prudential Securities in New York has installed an Intel IPSC high-performance supercomputer for its bond traders. The "Hypercube," as it is called, can be configured with between 8 and 128 CPUs (processors); when configured with 64 or more processors, it becomes a massively parallel processor. Each processor is responsible for executing its own program, in concert with all other processors. Termed multiple instruction, multiple data (MIMD) organization, it is the most sophisticated type of high-speed parallel processing.

When faced with a buy/sell situation, a broker wants to quickly run an analysis and make an offer. Say the broker is working on the trading floor at Prudential Securities (along with dozens of other brokers) and receives a call asking if he or she would like to bid on a bond. The trader turns to the terminal and enters the bond's unique identification number into a screen form. It is followed by menus that provide options — for example, market conditions, various factors or variables, comparisons with other bonds — for the type of analysis. The trader chooses the options and each analysis begins. Some of these analyses are computationally intense, and they are routed to the Hyper-cube for processing. Once finished, the results are routed back to the Hyper-cube and then to the trader's screen.

The Hypercube has given the trader a powerful analysis tool, on call, whenever there is a time-critical buy or sell situation. It's similar to an auto with a turbocharger; the car runs on the regular engine most of the time, but when the driver needs additional power the turbo kicks in. The Hypercube is a turbocharger on Prudential Securities' computing engine, and it can provide the analysis in anywhere between 30 and 40 seconds and several minutes, depending on its complexity. The traders find they can hedge a security better now, because they are better able to quantify it. They are able to control their risk and exposure better because they don't have to use crude computational analysis tools or their own intuition. In addition to the Hypercube, the trader can use one of Prudential Securities' RISC workstations, such as an IBM RS/6000 or Sun Microsystems Sparcstation, to design custom bonds—you might call them financial engineering workstations.

Supercomputer research has been on the forefront of new computer technology for some time. Even so, Neil Lincoln, who worked with Seymour Cray designing supercomputers at CDC, once defined a supercomputer as "a machine that is one generation behind the problems it is asked to solve." That problem, at least in processing hardware, is to create ever smaller, faster, cheaper computers.