60 ms cross-continent

Mon Jun 22 05:08:31 UTC 2020

Serious HFT moved to shortwave years ago. The chicago-NYC routes by
microwave still exist, but are only for things that need higher data rates
(as measured in kbps). It's hard to hide a giant log-periodic or yagi-uda
antenna. The sites near Chicago that are aimed at London are well known to
those in the industry.

On Sun, Jun 21, 2020 at 10:53 AM Brett Frankenberger <rbf+nanog at panix.com>
wrote:

> On Sun, Jun 21, 2020 at 02:17:08PM -0300, Rubens Kuhl wrote:
> > On Sat, Jun 20, 2020 at 5:05 PM Marshall Eubanks <
> marshall.eubanks at gmail.com>
> > wrote:
> >
> > > 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.
>
> For faster access to one exchange, yes, absolutely, colocate at the
> exchange.  But there's more then one exchange.
>
> As one example, many index futures trade in Chicago.  The stocks that
> make up those indices mostly trade in New York.  There's money to be
> made on the arbitrage, if your Chicago algorithms get faster
> information from New York (and vice versa) than everyone else's
> algorithms.
>
> More expensive but shorter fiber routes have been build between NYC and
> Chicago for this reason, as have a microwave paths (to get
> speed-of-light in air rather than in glass).  There's competition to
> have the microwave towers as close as possible to the data centers,
> because the last mile is fiber so the longer your last mile, the less
> valuable your network.
>
>
> https://www.bloomberg.com/news/features/2019-03-08/the-gazillion-dollar-standoff-over-two-high-frequency-trading-towers
>
>      -- Brett
>
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