6 ms·
I can't help but think of the stories from before stock market colocation was a thing. Nowadays the stock exchanges have a fair setup where people can put their
by im3w1l 6y ago
I can't help but think of the stories from before stock market colocation was a thing. Nowadays the stock exchanges have a fair setup where people can put their machines in the same data center as stock exchange. And everyone gets to connect with an equal length wire. But before this modern solution, it was a free for all with companies trying various tricks to rent space as close as possible.
- centimeter 6y ago> Nowadays the stock exchanges have a fair setup where ... everyone gets to connect with an equal length wire "Everyone" is pretty questionable here - it's quite expensive to rent rack space in an exchange, and not everyone gets to do it. That said, I think basically anyone who has any business doing latency-sensitive trading is probably capable of getting a rack.
- consz 6y agoThe prices are minimal -- at CME I believe it's ~15k/month for a 52U cabinet. You can rent these even as a private individual (several friends have rented individual racks as part of a syndicate group renting the whole cab). Of course, that price isn't insignificant per se, but are minimal for anyone who actually achieves any benefit from having co-located space.
- centimeter 6y agoHmm, my former firm’s colo expenses were quite a bit higher than that would suggest, but I don’t know the breakdown across all the different datacenters.
- bschne 6y agoIsn't this sort of still the case in HFT, where some firms try building e.g. their own microwave radio tower networks to beat others by a few milliseconds?
- Qworg 6y agoYes - between Chicago and NYC.
- hangonhn 6y agoA possible use for SpaceX's Starlink as well. Starlink doesn't have to follow the curvature of the earth so over long enough of a distance it is actually shorter and quicker to use Starlink.
- Ekaros 6y agoDon't you actually want to be as close to curvature of earth as you can? Or actually even under it. Straight line through the planet or crust would be the optimal route. Any distance you go up is making it longer than curvature.
- hangonhn 6y agoRight, so if you can't go through the crust then going up would be another option. Over long enough of a distance, say NYC to London (or even farther), the overhead of going up first and then a "straight" line horizontally (it's not completely straight because it has relay between the satellites via LOS laser but each arc would be fairly long) and back down would be shorter than a line following the curvature. (Edited: This is wrong. I had conflated the lower latency with shorter distance as others have pointed out.) BTW, I want to give full credit to my source: https://www.youtube.com/watch?v=giQ8xEWjnBs https://www.youtube.com/watch?v=giQ8xEWjnBs It also does a much better job of explaining it than I have but it is a convincing argument for how Starlink can be useful and why traders would be willing to pay a lot for it.
- gumby 6y agoFrom their very beginnings stock exchanges were by definition “colocated” as you had to meet in person to perform a transaction. (I know you meant server colo but I wanted to point out that this is yet another case of the back and forth swing Of distributed and centralized)
- pjc50 6y agoYeah; the logical conclusion of free market doctrine is that everything will become a spot-traded market, traded at the highest frequency possible. Complete with all sorts of dodgy payyment for order flow, arguments over best execution, pseudo-indexes like LIBOR, and overt front-running of clients.