4 ms·

The question isn't whether satellite links can beat deep-sea cables, it's whether they can beat shortwave. https://sniperinmahwah.wordpress.com/2018/05/07/shor

• bhouston 3y ago
  And HFT setups are also nearly colocated with the exchanges I understand -- as close as they can get physically, so adding a hop to space and back may be adding quite a bit of distance.
  • heipei 3y ago
    This would be about reducing latency between these two exchanges to enable arbitrage opportunities the way I understood it.
    • ortusdux 3y ago
      Exactly. IEX exchange is relatively new, and their big innovation is that they use long spools of fiberoptic wire to delay their user's connections, thus creating an even playing field. https://www.sec.gov/files/07feb18_hu_iex_becoming_an_exchange.pdf https://www.sec.gov/files/07feb18_hu_iex_becoming_an_exchang... "The reduction in trading costs (spreads) is broadly consistent with recent theories on how speed advantages may be used to exploit mechanical arbitrage opportunities. These theories suggest that market makers face adverse selection from fast traders even in the absence of traditional “fundamental” informed trading. For instance, Budish et al. (2015) defnes “quote sniping” as the mechanical arbitrage of taking “stale” quotes before market makers can cancel. In his Comment Letter on IEX’s Exchange Application, Eric Budish argues that IEX’s speed bump may be able to mitigate quote sniping as it allows IEX’s pegged orders to avoid executing against market orders at stale prices.7 Moreover, cross-sectional di˙erences in spreads in response to IEX’s protected quote are consistent with recent theory suggesting that exchange speed is a double-edged sword for market makers (Menkveld and Zoican, 2016). On one hand, faster exchanges allow market makers to update their quotes faster, reducing spreads. On the other hand, higher exchange speed results in a higher probability of quote sniping. Hence, the results support this more nuanced view of the net e˙ects of speed on trading costs. "
      • pests 3y ago
        How does it create a level playing field? Everyone gets the same treatment. Everyone is delayed the same amount.
    • willis936 3y ago
      "Why is our market crashing" might actually have something to do with the price of tea in China soon.
  • tikhonj 3y ago
    It would be relevant for transmitting information from different exchanges (NYC ⇔ London ⇔ Tokyo... etc), not going from the trading firm's systems to the exchanges. At a high level, the firms would be making money by helping markets on different continents synchronize faster.
  • deleted 3y ago
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  • jdblair 3y ago
    I think the use case is signalling between exchanges for millisecond advantages in arbitrage trades, not for trading on a single exchange. See https://spectrum.ieee.org/wall-street-tries-shortwave-radio-to-make-highfrequency-trades-across-the-atlantic https://spectrum.ieee.org/wall-street-tries-shortwave-radio-...
• moffkalast 3y ago
  How can that scale when they need to increase trading volume? Radio has jack shit in terms of bandwidth.