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This should be understood as high frequency stock traders fighting for turf. One shop tries to access broadcasting bands to enable higher powers, thus, more rel

by yholio 6y ago

This should be understood as high frequency stock traders fighting for turf. One shop tries to access broadcasting bands to enable higher powers, thus, more reliable transmission, by multiplexing the payload with general purpose economic news - allegedly. Another HFT shop is trying to preempt this. The race for speed in financial markets has reached a point where no existing fiber optic or satelite based system can compete; the state of the art are short wave radio that bounce back on the ionosphere and enable intercontinental communication at the speed of light over the shortest path and with no intermediary hops. Fiber optics, for contrast, can only do about 2/3 of the speed of light and impose non-direct routes and multiple hops.

p49k 6y ago
A HN comment in another thread (which I can’t find atm) states that this is no longer relevant because exchanges now allow colocation in the same buildings as the servers running the exchange, and it’s relatively inexpensive. Is that comment inaccurate?
- blutack 6y ago
  These links are often used for executing strategies or sending information between different exchanges (a classic example being the cross-exchange arbitrage).
  - bluGill 6y ago
    To put it more concrete, there are a number of very large companies that have their stock traded in many locations. Japan, London, and New York all have big stock exchanges (that is just what I know of without looking - if you told me those were the only 3 cities with global stock markets I'd call you a lier). If you see a big company in London trading for slightly less than the same company in New York then you should buy stock in London and see it in New York, but you need to be first - there are several others trying to do the same thing that have enough money to make the price even alone. (my guess is that we are talking about needing $10,000 in cash ready to pull this off for the biggest companies)
    - bradknowles 6y ago
      This is called “arbitrage”. It takes millions and billions of dollars to play this game. Keep in mind that the majority of back-end clearing and settlement of trades in Europe is done by Euroclear [0], who reported over 27 Trillion Euros of assets under management in 2015. In the US, virtually all back-end clearing and settlement is handled by DTCC [1], who reported handling over 1.7 Quadrillion dollars worth of value in 2011. That’s the scale of the market you’re playing in when you first pretend to arbitrage. [0]: https://en.wikipedia.org/wiki/Euroclear https://en.wikipedia.org/wiki/Euroclear [1]: https://en.wikipedia.org/wiki/Depository_Trust_%26_Clearing_Corporation https://en.wikipedia.org/wiki/Depository_Trust_%26_Clearing_...
      - bluGill 6y ago
        True, to make money you need a ton. Sometimes you will make bad trades. Even when it works out your gross profit on the 10000 trade is 100, out of which you need to pay expenses. It isn't a place for small players, but the amount of money on an individual trade isn't much.
    - alexpil 6y ago
      Not necessarily stonks, it can also be commodities (oil/etc), or currencies, or anything else. Latency arbitrage is old. Paul Julius Reuter (as in, Reuters) made his first fortune by using carrier pigeons to transmit trade data from Brussels to Aachen. Then he started a new agency and built telegraph lines. Rice traders in Japan used boats/smoke-signals/runners to transmit information between rice markets in 1700s https://digital.sandiego.edu/cgi/viewcontent.cgi?article=1112&context=sdlr https://digital.sandiego.edu/cgi/viewcontent.cgi?article=111... pages 15-22 has more examples.
KirinDave 6y ago
I guess my question is: as an amateur radio enthusiast, why should I tolerate a special exception for THESE people to broadcast data if I can't even do something as simple as coordinate club meeting addresses in private over the airwaves? Even if I saw HFT as a valuable thing (I don't), it's unfair to create a new exemption for these people just because they have money. And if you suggest that he government shouldn't be involved, then keep in mind the only practical force stopping someone from jamming these transmissions is the exact same government bandwidth allocation guidelines. This should not be understood as an infight by HFTs. It should be understood as the radio waves of the world being a public, shared resource and folks asking, "Are we changing these rules now?" If so, it should be done equitably.
- anon9001 6y ago
  > why should I tolerate a special exception for THESE people to broadcast data The problem is it's not about you or me tolerating the special exception or not. It's about recourse, and we have none. > a new exemption for these people just because they have money The people with money can donate to all the politicians and make them aware of their needs, in exchange for the donations continuing. That's their recourse. > This should not be understood as an infight by HFTs. But that's exactly what it is. Multiple entities with money lobbying the same government for favorable results.
  - kd0amg 6y ago
    Yes, the active parties in the fight are two HFTs jockeying for latency advantage, but the scope of the fight goes beyond HFT: they are fighting over use of a scarce public resource.
- smkellat 6y ago
  As Glenn Hauser, Kim Andrew Elliott, and others have asked it comes down to the big question of what regs exactly authorize this. There really isn’t any ambiguity in the relevant rules to sneak this in under.
parliament32 6y ago
>bounce back on the ionosphere >the shortest path That's effectively the opposite of shortest path. If you really want the best performance you'd set up a line of microwave links.. I'm not sure how much latency the hops would add but if you have fast enough gear, it's probably not enough to justify going all the way up and back down.
- reaperducer 6y ago
  You missed the word "intercontinental" in the parent poster's message. Good luck setting up a microwave link between New York and London that will be faster than a short wave transmission.
  - alexpil 6y ago
    sure, balloons would do it. i've prototyped that. :)
- giantrobot 6y ago
  The ionosphere is not all that far away. Radio travels at about 0.97c in the atmosphere. At shortwave frequencies the ionospheric E layer provides the best reflection IIRC. The E layer's altitude is less than 100 miles (60-90mi) but can bounce a signal hundreds of miles horizontally. If you want to reach a receiver a hundred miles away an HF bounce off the E layer would get there in 0.659ms (if my math is right). If you had a 100 mile long fiber optic cable your signal would get there in 0.813ms. Microwave repeaters can be very fast so long as you've got good positioning. If you managed a straight line of repeaters to a receiver you might be able to beat the HF path. For the best results microwave repeaters shouldn't be too far apart so for the hundred mile trip you'd want several repeaters. Each is going to add something like 150ns latency. This is cumulative with the 0.97c air latency. And it's only to a single receiver. So microwave repeaters would beat HF sometimes, depending on topography, to a single receiver. I think HF would end up winning out more often than not and wouldn't require the infrastructure of the microwave repeaters. It would make siting receivers much easier and would likely allow receiving stations to optimize siting for the last mile to the trading systems. That being said I don't think HFTs should be able to abuse HF by broadcasting things not usable by the general public. If they want to cut their latency they can use some of their hojillions of dollars to build microwave infrastructure or pay everyone for use of the HF airwaves they want to make money with.

by yholio 6y ago

p49k 6y ago

A HN comment in another thread (which I can’t find atm) states that this is no longer relevant because exchanges now allow colocation in the same buildings as the servers running the exchange, and it’s relatively inexpensive. Is that comment inaccurate?

blutack 6y ago
These links are often used for executing strategies or sending information between different exchanges (a classic example being the cross-exchange arbitrage).
- bluGill 6y ago
  To put it more concrete, there are a number of very large companies that have their stock traded in many locations. Japan, London, and New York all have big stock exchanges (that is just what I know of without looking - if you told me those were the only 3 cities with global stock markets I'd call you a lier). If you see a big company in London trading for slightly less than the same company in New York then you should buy stock in London and see it in New York, but you need to be first - there are several others trying to do the same thing that have enough money to make the price even alone. (my guess is that we are talking about needing $10,000 in cash ready to pull this off for the biggest companies)
  - bradknowles 6y ago
    This is called “arbitrage”. It takes millions and billions of dollars to play this game. Keep in mind that the majority of back-end clearing and settlement of trades in Europe is done by Euroclear [0], who reported over 27 Trillion Euros of assets under management in 2015. In the US, virtually all back-end clearing and settlement is handled by DTCC [1], who reported handling over 1.7 Quadrillion dollars worth of value in 2011. That’s the scale of the market you’re playing in when you first pretend to arbitrage. [0]: https://en.wikipedia.org/wiki/Euroclear https://en.wikipedia.org/wiki/Euroclear [1]: https://en.wikipedia.org/wiki/Depository_Trust_%26_Clearing_Corporation https://en.wikipedia.org/wiki/Depository_Trust_%26_Clearing_...
    - bluGill 6y ago
      True, to make money you need a ton. Sometimes you will make bad trades. Even when it works out your gross profit on the 10000 trade is 100, out of which you need to pay expenses. It isn't a place for small players, but the amount of money on an individual trade isn't much.
  - alexpil 6y ago
    Not necessarily stonks, it can also be commodities (oil/etc), or currencies, or anything else. Latency arbitrage is old. Paul Julius Reuter (as in, Reuters) made his first fortune by using carrier pigeons to transmit trade data from Brussels to Aachen. Then he started a new agency and built telegraph lines. Rice traders in Japan used boats/smoke-signals/runners to transmit information between rice markets in 1700s https://digital.sandiego.edu/cgi/viewcontent.cgi?article=1112&context=sdlr https://digital.sandiego.edu/cgi/viewcontent.cgi?article=111... pages 15-22 has more examples.

KirinDave 6y ago

I guess my question is: as an amateur radio enthusiast, why should I tolerate a special exception for THESE people to broadcast data if I can't even do something as simple as coordinate club meeting addresses in private over the airwaves? Even if I saw HFT as a valuable thing (I don't), it's unfair to create a new exemption for these people just because they have money. And if you suggest that he government shouldn't be involved, then keep in mind the only practical force stopping someone from jamming these transmissions is the exact same government bandwidth allocation guidelines. This should not be understood as an infight by HFTs. It should be understood as the radio waves of the world being a public, shared resource and folks asking, "Are we changing these rules now?" If so, it should be done equitably.

anon9001 6y ago
> why should I tolerate a special exception for THESE people to broadcast data The problem is it's not about you or me tolerating the special exception or not. It's about recourse, and we have none. > a new exemption for these people just because they have money The people with money can donate to all the politicians and make them aware of their needs, in exchange for the donations continuing. That's their recourse. > This should not be understood as an infight by HFTs. But that's exactly what it is. Multiple entities with money lobbying the same government for favorable results.
- kd0amg 6y ago
  Yes, the active parties in the fight are two HFTs jockeying for latency advantage, but the scope of the fight goes beyond HFT: they are fighting over use of a scarce public resource.
smkellat 6y ago
As Glenn Hauser, Kim Andrew Elliott, and others have asked it comes down to the big question of what regs exactly authorize this. There really isn’t any ambiguity in the relevant rules to sneak this in under.

parliament32 6y ago

>bounce back on the ionosphere >the shortest path That's effectively the opposite of shortest path. If you really want the best performance you'd set up a line of microwave links.. I'm not sure how much latency the hops would add but if you have fast enough gear, it's probably not enough to justify going all the way up and back down.

reaperducer 6y ago
You missed the word "intercontinental" in the parent poster's message. Good luck setting up a microwave link between New York and London that will be faster than a short wave transmission.
- alexpil 6y ago
  sure, balloons would do it. i've prototyped that. :)
giantrobot 6y ago
The ionosphere is not all that far away. Radio travels at about 0.97c in the atmosphere. At shortwave frequencies the ionospheric E layer provides the best reflection IIRC. The E layer's altitude is less than 100 miles (60-90mi) but can bounce a signal hundreds of miles horizontally. If you want to reach a receiver a hundred miles away an HF bounce off the E layer would get there in 0.659ms (if my math is right). If you had a 100 mile long fiber optic cable your signal would get there in 0.813ms. Microwave repeaters can be very fast so long as you've got good positioning. If you managed a straight line of repeaters to a receiver you might be able to beat the HF path. For the best results microwave repeaters shouldn't be too far apart so for the hundred mile trip you'd want several repeaters. Each is going to add something like 150ns latency. This is cumulative with the 0.97c air latency. And it's only to a single receiver. So microwave repeaters would beat HF sometimes, depending on topography, to a single receiver. I think HF would end up winning out more often than not and wouldn't require the infrastructure of the microwave repeaters. It would make siting receivers much easier and would likely allow receiving stations to optimize siting for the last mile to the trading systems. That being said I don't think HFTs should be able to abuse HF by broadcasting things not usable by the general public. If they want to cut their latency they can use some of their hojillions of dollars to build microwave infrastructure or pay everyone for use of the HF airwaves they want to make money with.