60 ms cross-continent

Rubens Kuhl rubensk at gmail.com
Sun Jun 21 17:17:08 UTC 2020

On Sat, Jun 20, 2020 at 5:05 PM Marshall Eubanks <marshall.eubanks at gmail.com>

> This was also pitched as one of the killer-apps for the SpaceX
> Starlink satellite array, particularly for cross-Atlantic and
> cross-Pacific trading.
> https://blogs.cfainstitute.org/marketintegrity/2019/06/25/fspacex-is-opening-up-the-next-frontier-for-hft/
> "Several commentators quickly caught onto the fact that an extremely
> expensive network whose main selling point is long-distance,
> low-latency coverage has a unique chance to fund its growth by
> addressing the needs of a wealthy market that has a high willingness
> to pay — high-frequency traders."
This is a nice plot for a movie, but not how HFT is really done. It's so
much easier to colocate on the same datacenter of the exchange and run
algorithms from there; while those algorithms need humans to guide their
strategy, the human thought process takes a couple of seconds anyways. So
the real HFTs keep using the defined strategy while the human controller
doesn't tell it otherwise.

And in order to preserve equality among traders, each exchange already adds
physically (loops of fiber or copper cable) some ns to closer racks so
everyone gets at the system at the same time.

And then comes a really high added latency of the trade risk controller,
which limits what a trader is allowed to expose itself to what is deposited
or agreed with the exchange. And this comes with both latency and jitter
due to its implementation, making even the faster HFT only faster on
average, not faster at every transaction.

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