Getting Real

The current trading system apparently uses some sort of bizarre batch processing system developed back in the 1970s.

The primary reason for developing a new exchange system is that a new exchange system would handle stock transfers in real time.

The actual programming of a real time exchange is actually easier than a batch exchange. The basic overview of the system is that the seller would identify the shares to trade. The seller would place the shares on the auction block. When the buyer buys the stock, the stock would transfer directly into the buyer's account.

This is basically what happens at the grocery store. The cashier tallies up all of the items in a grocery cart. The shopper stares at the astronomical price of food. Makes a snide comment, then accepts the sale and gives the cashier money for the groceries.

A real time database can be more efficient than a checkout stand. For example, a database could hold an entry for every stock issued against an equity. In the bidding process, the seller would identify the shares to auction. The system would place a lock on the shares. When a buyer buys shares, the system would write a timestamped line for each share in a transaction file, then update the main record for each share with the new owner.

If all goes well, the system would then release the lock. If there was a problem with the transaction, it could role back the trade and place it immediately in a dispute resolution system.

Such a trading system would give a full and complete audit trail for each and every transaction. It would also be possible to run a query at any point and identify the owners of each and every share.

The data from the trading system could be used in a voting system as it would be possible to place a query against the database and find the owner of each share at any given point in time.

While a real time transaction would be the main selling feature a new trading program. The trade itself is the easiest thing to program. The more difficult parts of the program would come in the areas of user authentication and the transfer of funds in the purchase of stock.