9 ms·
Companies Pitch Shortwave Radio to Shave Milliseconds Off Trades
- cameldrv 6y agoThis has been going on for several years at least. These are some pretty good articles from some amateur sleuths: https://sniperinmahwah.wordpress.com/2018/05/07/shortwave-trading-part-i-the-west-chicago-tower-mystery/ https://sniperinmahwah.wordpress.com/2018/05/07/shortwave-tr... https://sniperinmahwah.wordpress.com/2018/06/07/shortwave-trading-part-ii-faq-and-other-chicago-area-sites/ https://sniperinmahwah.wordpress.com/2018/06/07/shortwave-tr... https://sniperinmahwah.wordpress.com/2018/07/13/shortwave-trading-part-iii-fourth-chicago-site-east-coast-patent-regulation-and-farmer-kevin-mystery/ https://sniperinmahwah.wordpress.com/2018/07/13/shortwave-tr... https://sniperinmahwah.wordpress.com/2018/07/16/shortwave-trading-part-iv-sleuthing-examples-research-tools-techniques-deputies-wanted/ https://sniperinmahwah.wordpress.com/2018/07/16/shortwave-tr...
- im3w1l 6y agoSo if glass slows the signal down, would it be possible to use a hollow fiber?
- toomuchtodo 6y agoMicrowave is traditionally used to reduce latency caused by fiber’s refractive index. I suppose you could bury waveguides, but an air interface works just as well (besides the occasional weather; better to be fast most of the time). https://arstechnica.com/information-technology/2016/11/private-microwave-networks-financial-hft/ https://arstechnica.com/information-technology/2016/11/priva...
- selectodude 6y agoI can assure you, that link already exists several times over. There are dozens of links between Aurora and 350 E Cermak, and dozens more between 350 E Cermak and Cateret, NJ. There's even an entire ISP based off the lowest latency link between Chicago and New York. https://en.wikipedia.org/wiki/Spread_Networks https://en.wikipedia.org/wiki/Spread_Networks
- deleted 6y ago[deleted]
- acjohnson55 6y agoWhat's in Aurora? And why West Chicago in the original article? Amusingly, I grew up 2 towns over from Aurora and live 3 towns from Carteret now.
- jleahy 6y agoThe CME datacenter is in Aurora, and the ICE datacenter is in Chicago proper.
- acjohnson55 6y agoAh, cool. Is there a significant operation in West Chicago, too? From the article, I was still confused by why a shortwave tower would be located there. West Chicago is close to Aurora, I suppose, but if it's for CME data center, why not put the tower in Aurora?
- musicale 6y agoIt's weird that we've set up a stock market for machines rather than humans, where ever-faster bots interpose themselves between slightly slower bots, all the way up to the original buyer and seller, who are probably bots as well.
- missedthecue 6y agoThe machines help humans. The bid/ask spread on a $100 share in 1970 as $5. Now it's $0.003 cents and it will continue to narrow, saving you and I money.
- adrianN 6y agoHow big would it be if we limited machine trading such that milliseconds don't matter? Say run everything with 1Hz frequency instead?
- logicchains 6y agoIt would be much wider, because the dumber your pricing, the less certain you can be about how the price may move, so you have to be more cautious and quote wider.
- arnoooooo 6y agoThis sounds like circular logic to me. It really saves money to people who want to buy and sell often, which has no social value. I think having a penalty for buying and selling too often is a feature, not a bug : we want investors that think long term.
- logicchains 6y ago>which has no social value Who made you the global arbiter of social value? Clearly the people participating in the transaction see some value in it.
- icelancer 6y ago>> I think having a penalty for buying and selling too often is a feature, not a bug : we want investors that think long term. This already exists. It's the long-term capital gains tax reduction compared to short-term cap gains tax, and very high corporate taxes (relative to the rest of the world).
- walrus01 6y agoIt's pretty hard to hide a yagi-uda antenna capable of transoceanic distance communications. The data rates are MUCH lower than what's possible by fiber and microwave, as pointed out in the article.
- neonate 6y agohttps://archive.vn/80BAE https://archive.vn/80BAE
- sargun 6y agoI remain convinced that this is Starlink's short-term customer if their promises are true. They are doing transmission via optical as the crow flies. If they're doing O-O, or even low latency O-E-O, they can beat transatlantic fiber. For HFT houses, that's potentially a major edge.
- ncmncm 6y agoStarlink might get as much for denying access to specific other parties as for selling access in the first place.
- modeless 6y agoStarlink latency would be worse than shortwave. The advantage would be bandwidth, but I doubt that high bandwidth is really helpful for this application, especially if you have to give up a tiny bit of latency for it. After all, you can already have all the bandwidth you want with only slightly higher latency.
- hef19898 6y agoIf memory works well, they have dedicated glass fibre for bandwidth, at least between Chicago and NY. Took the closest possible distance. Microwave is used for speed, in addition, to get binary signals from A to B. I heard that theory more than once about Starlink, it just doesn't make that much sense to me. Starlink could also be, of course, a clever way of getting a) enough launches to make reusable rockets financially feasible and/or b) getting financing for SpaceX Quite some other companies trying the same went under recently.
- alexpil 6y agostarlink latency could be faster than shortwave, once full gen2 constellation launches, and if starlink decides to care about this industry. ...disclosure: i'm the first one to build NY-Chi microwave, and Chi-Lon shortwave.
- modeless 6y agoCool! How do you figure? Doesn't shortwave take the great circle path, at lower altitude, making the path shorter?
- ncmncm 6y agoNow they need a bidding market to determine who gets to choose whether to send a 1 or 0 in the next available slot. And another market for which bits to jam and prevent either value from getting through.
- sgt101 6y agoIf I was regulating the markets I would introduce a random ~100ms delay into all transactions.
- VMG 6y agoThe company who has the best latency would still beat the competitors.
- gspr 6y agoAre you sure about that? They would on average perhaps be a slight bit faster, but if the randomized delays are an order of magnitude larger than the latency, they may not be able to do anything useful with that advantage.
- bryanrasmussen 6y agowouldn't it be like this? If the delays are randomized then you have as good as chance of getting them as your competitors. On delayed times you will have a bad chance of winning, but in comparison to others with the same delays your latency beats theirs, on non-delayed times your latency beats non-delayed competitors and really beats delayed competitors. Thus in the end the best latency should win biggest on non-delayed trades, and on delayed trades lose least.
- gspr 6y agoUnless that uncertainty now means that your time and resources is best spent elsewhere than shaving ms off your latency.
- zodiac 6y agoWell, think through some toy examples. Suppose there is a market without order matching (again, toy example) and one market participant enters an extremely mispriced order, so the first person to fill that order wins. Even in the presence of random delays, the participant with the lowest-latency connection has a higher chance of filling the order than anyone else. (There are other anomalies, e.g. participants are now incentivized to have as large a number of distinct connections and hence "chances to roll low" on the randomized delay as possible).
- oizin 6y agoInterview with the CEO of Raft Technologies, a company offering this service: https://chatwithtraders.com/ep-197-haim-ben-ami/ https://chatwithtraders.com/ep-197-haim-ben-ami/