4 ms·

Chicago to London one way is around 35ms over fibre but that could be down to 21ms over the air like this. That signal is only about 10-15khz wide[1] from that

Chicago to London one way is around 35ms over fibre but that could be down to 21ms over the air like this. That signal is only about 10-15khz wide[1] from that diagram. That’s not a whole lot of data transfer ability, measured in the low kbps range rather than mbps. Very low kbps when you add in error correction. We are moving out of / have left the solar minimum so the MUF is usually well above the 20 metre band each day now so going forward, it might be a good capability to have while it lasts for the next 8 years or so. [1] I don’t know what scale division the ticks at the top represent but the SSB signals to the left would be up to around 3khz wide.

raviolo 6y ago
One does not need a lot of bandwidth to trade successfully. In fact, a limited number of signals agreed upon ahead of time is enough. E.g. signal “A” could mean “buy 10 contracts”, signal “B” - “sell 100 contracts”, etc. And you can of course wrap 256 such signals into one byte. So transmitting a single byte at an opportune time let’s you control your trading on the other continent in a quite precise fashion. If you make such transmission, say, 10 times per day your bandwidth utilization is technically 10 bytes per day or about 0.001 bps - yet you can make a ton of money.
- jandrese 6y ago
  All you really need to do is to beat the trade you just saw enter the system so you can buy the trade out from under them and mark it up while their bits are still stuck in glass. You know, "provide liquidity".
  - kasey_junk 6y ago
    That’s not at all how it works.
    - jandrese 6y ago
      If not why do they need to have the lowest latency? Seems to me that if you want to provide liquidity what you need to do is buy a wide range of stocks and sit on them so they're all listed and available for trade. But you don't need extremely low latency for that. If you're providing liquidity you should be sitting on an insanely diverse portfolio at the end of every day. The whole point is to make sure trades are available so nobody is waiting for something to appear on the market.
      - kasey_junk 6y ago
        When trading on exchanges no one can see your order before it makes it to the exchange, it’s literally a private connection directly to the exchange. Once your order hits the exchange 1 of 2 things can happen, your order can trade (that is it immediately clears) and all participants get an update which shows the new state of the exchange (the previous state minus whichever order(s) your order matched against). Or your order doesn’t trade, it “rests” because your price doesn’t match what anyone else is offering. At that point your order is at the back of the queue at that price and all other participants get an update showing the new state of the market with your order added to the state. So why is latency important? The most important reason is not adding orders, which is only important if no one is already quoting your price, it’s for cancelling orders. If you get some information that makes you think your orders are incorrectly priced you want to cancel them before anyone can take advantage of that and then get new orders in at the new price you think is correct. This information is either off exchange (e.g. the fed job report) or is on the current exchange or another similar one (e.g. some big hedge fund is selling a ton of Swiss Francs in European exchanges). On the map in the article exist 2 exchanges, the CME and the ICE which trade different but highly correlated symbols (CME WTI oil and ICE Brent oil). If I see a price change on the CME for those correlated symbols I can bet with high confidence the price will change for the ICE symbols as well, so I’ll race to cancel my orders that don’t reflect that new anticipated price. For market makers providing liquidity order management is as important if not more so than inventory management and that’s where speed reduces risk, allowing them to provide cheaper liquidity. A market maker wants to end the day flat on inventory with well positioned orders. Holding a big portfolio of inventory is the worst case scenario.
  - KirillPanov 6y ago
    Heh. Yeah I have no idea why everybody who isn't doing HFT hasn't decided to stop letting these guys rip them off and moved to investor sex change er, sorry, put the spaces in the wrong place there, I meant: investors exchange They basically encoded a bunch of HFT-thwarting principles into their clearing policies: https://en.wikipedia.org/wiki/Investors_Exchange#Operating_principles https://en.wikipedia.org/wiki/Investors_Exchange#Operating_p... It's a great idea. But every time I see that name I can't keep my brain from moving the spaces around. I mean seriously what were they thinking with that name.
    - scatters 6y ago
      Yeah, why? Maybe because HFT actually do provide a service valuable to retail.
      - londons_explore 6y ago
        Or because retail have no choice but to lose a few tenths of a percent of every trade to HFT leeches..
- m4rtink 6y ago
  Something similar was used for landing the original Mars Rovers - not actual full data telemetry channel but just a very simple very low bandwidth signal that can be translated to symbols, each signifying an important phase of the landing being reached.
deleted 6y ago
[deleted]

raviolo 6y ago

One does not need a lot of bandwidth to trade successfully. In fact, a limited number of signals agreed upon ahead of time is enough. E.g. signal “A” could mean “buy 10 contracts”, signal “B” - “sell 100 contracts”, etc. And you can of course wrap 256 such signals into one byte. So transmitting a single byte at an opportune time let’s you control your trading on the other continent in a quite precise fashion. If you make such transmission, say, 10 times per day your bandwidth utilization is technically 10 bytes per day or about 0.001 bps - yet you can make a ton of money.

jandrese 6y ago
All you really need to do is to beat the trade you just saw enter the system so you can buy the trade out from under them and mark it up while their bits are still stuck in glass. You know, "provide liquidity".
- kasey_junk 6y ago
  That’s not at all how it works.
  - jandrese 6y ago
    If not why do they need to have the lowest latency? Seems to me that if you want to provide liquidity what you need to do is buy a wide range of stocks and sit on them so they're all listed and available for trade. But you don't need extremely low latency for that. If you're providing liquidity you should be sitting on an insanely diverse portfolio at the end of every day. The whole point is to make sure trades are available so nobody is waiting for something to appear on the market.
    - kasey_junk 6y ago
      When trading on exchanges no one can see your order before it makes it to the exchange, it’s literally a private connection directly to the exchange. Once your order hits the exchange 1 of 2 things can happen, your order can trade (that is it immediately clears) and all participants get an update which shows the new state of the exchange (the previous state minus whichever order(s) your order matched against). Or your order doesn’t trade, it “rests” because your price doesn’t match what anyone else is offering. At that point your order is at the back of the queue at that price and all other participants get an update showing the new state of the market with your order added to the state. So why is latency important? The most important reason is not adding orders, which is only important if no one is already quoting your price, it’s for cancelling orders. If you get some information that makes you think your orders are incorrectly priced you want to cancel them before anyone can take advantage of that and then get new orders in at the new price you think is correct. This information is either off exchange (e.g. the fed job report) or is on the current exchange or another similar one (e.g. some big hedge fund is selling a ton of Swiss Francs in European exchanges). On the map in the article exist 2 exchanges, the CME and the ICE which trade different but highly correlated symbols (CME WTI oil and ICE Brent oil). If I see a price change on the CME for those correlated symbols I can bet with high confidence the price will change for the ICE symbols as well, so I’ll race to cancel my orders that don’t reflect that new anticipated price. For market makers providing liquidity order management is as important if not more so than inventory management and that’s where speed reduces risk, allowing them to provide cheaper liquidity. A market maker wants to end the day flat on inventory with well positioned orders. Holding a big portfolio of inventory is the worst case scenario.
- KirillPanov 6y ago
  Heh. Yeah I have no idea why everybody who isn't doing HFT hasn't decided to stop letting these guys rip them off and moved to investor sex change er, sorry, put the spaces in the wrong place there, I meant: investors exchange They basically encoded a bunch of HFT-thwarting principles into their clearing policies: https://en.wikipedia.org/wiki/Investors_Exchange#Operating_principles https://en.wikipedia.org/wiki/Investors_Exchange#Operating_p... It's a great idea. But every time I see that name I can't keep my brain from moving the spaces around. I mean seriously what were they thinking with that name.
  - scatters 6y ago
    Yeah, why? Maybe because HFT actually do provide a service valuable to retail.
    - londons_explore 6y ago
      Or because retail have no choice but to lose a few tenths of a percent of every trade to HFT leeches..
m4rtink 6y ago
Something similar was used for landing the original Mars Rovers - not actual full data telemetry channel but just a very simple very low bandwidth signal that can be translated to symbols, each signifying an important phase of the landing being reached.

deleted 6y ago

[deleted]