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They almost certainly already have servers in a DC in Frankfurt - the point is that being able to communicate current prices between the major markets faster th
by pja 10y ago
They almost certainly already have servers in a DC in Frankfurt - the point is that being able to communicate current prices between the major markets faster than anyone else gives you a trading edge over other market participants.
- bogomipz 10y agoDoesn't the trading logic live on that machine in the a data center in Frankfurt? It responds to signals and executes trades based on those signal correct? It doesn't require hitting an API like in a standard web app right? From my admittedly limited exposure to an electronic trading shop, that logic was maybe updated a few times a day but largely ran as a state machine based on signals and market feeds. What am I missing?
- pja 10y agoSure, some HFT strats are locally encoded. But that’s not the only way to make money. If what you want to do is run arbitrage between different exchanges then being faster than everyone else gives you an edge. You can take advantage of price differentials before anyone else does plus you get to front run news that has market impact round the world before anyone else can get their orders in. There are plenty of ways to make money if you’re faster than everyone else at getting data from exchange A to exchange B.