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What I'm confused by is the way this article talks about lower-latency intercity links as valuable for HFT activities. Surely if you're an NY fund you just buy
by dbuxton 14y ago
What I'm confused by is the way this article talks about lower-latency intercity links as valuable for HFT activities. Surely if you're an NY fund you just buy servers in Chicago or wherever. Can anyone explain why these low latency links could be valuable? (Over and above general infrastructure?)
- th0ma5 14y agoThey are actually trying to shave off milli and nano seconds in their trades being registered compared to the competition, right?
- Locke1689 14y agoThe exchanges are correlated so if you're fast enough you may be able to execute on arbitrage, I would assume.
- sseveran 14y agoBecause futures and options are traded in Chicago and equities are traded in NYC (well north jersey) there are opportunities to trade equities and their derivative counterparts. For instance SPY (S&P 500 ETF) in NYC and ES (S&P 500 futures contract) can be traded against each other as they move. However the guy who gets their first will get most or all of the profit. So you need servers on both sides and the lowest latency possible links between them. For instance a microwave network is being built which shaves a couple of milliseconds off the existing special fiber cable that traders have been using.
- LOLtampicoLOL 14y agoCan you say a bit more about the details of this microwave network?