Recently, there has been a lot of information distributed in the industry regarding latency in optical transport systems. This white paper takes an objective look at what really causes latency in transport systems and what to look for in a transport system designed for low latency. Download Now
Webinar: Trading Beyond the Horizon
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Herndon, VA (PRWeb) June 25, 2009, 2009 No longer can a trader meet their low latency requirements by just collocating in the same facility as the exchanges. The exchanges are spread out now, and so is the market data essential to successful execution of trading strategies. Traders need to find the optimal combination of space and network configuration that is central to the market data feeds and the exchanges they are trading on. That is why CFN Services is extending FiberSource Advisor® to include a Financial Services specific practice. Working with CFN Services FiberSource Advisor® to help meet low latency requirements allows Trading Firms the ability to focus resources on the trading environment, platform, messaging, algorithms and other essential key areas. FiberSource Advisor® provides the trading firm a roadmap to optimize their network; helping plan and configure the optimal collocation sites, lowest latency networking solutions, and peace of mind achieved with full disclosure of all options available. Read More: FIberSource_Advisor_Feb_2010
In 2010, financial markets participants will continue to expand their trading activities as liquidity increasingly becomes fragmented, seeking alpha in new markets, best execution in dark pools, arbitrage opportunities across the order book and by implementing high frequency and complex, multi-leg, cross asset class strategies.
The successful operations – whether they be the proprietary desks of traditional broker/dealers, specialist high frequency and algorithmic traders, or quantitative hedge funds – will leverage a trading infrastructure that combines high performance analytical, algorithmic and order routing platforms with the lowest latency access to multiple, geographically dispersed execution venues.
Multi-market trading – leveraging a fragmented market landscape – introduces new challenges, even for trading firms that have mastered the complexities of low-latency execution using approaches such as co-location and proximity. Those mechanisms, while still relevant, provide a less complete solution when trading across markets that are geographically dispersed.
New entrants into the market for connectivity and proximity services include organizations that are themselves market participants, such as sell-side firms offering sponsored access and DMA, and liquidity venues, which are now providing global order routing networks, in some cases channelling order flow to their competitors.
Those service providers join traditional players including telcos, hosting companies and value-added extranet vendors, who often bundle trading applications with connectivity.
The bottom line: For multi-market trading, optimization of long-haul and metro communications links, combined with smart use of co-location, is an imperative for achieving the lowest latency, and this requires an understanding of connectivity offerings at a deep, granular level.
This industry briefing explains the drivers for fragmentation and multi-market trading, the evolving landscape of market access, and explores connectivity approaches to minimize latency.
Posted by Dan Hubscher
CFN offers the lowest latency from Chicago, New York, to BM&F Bovespa
The trading business feels like a fight, now as ever, with the threat of sweeping regulations as the most pressing concern of the moment. This business even sounds like a war, too – with algorithms names like “Raider” and “Sniper;” and with terms like “dark pools,” and “low latency arms race” drawing focus from regulators and media alike. But the war-like aspect remains because trading is a highly competitive business.
The imperative to increase market share will remain a top priority this year along with risk management and regulatory compliance, and the technology required to compete is available to everyone. As Apama has expressed before here, the markets are still driven by those with the flexibility to quickly adapt to new regulations, the insight to understand new market behaviors, and the imagination to conceive a trading strategy that can capitalize on the opportunity. It’s no wonder that the relatively small number of firms using high frequency trading strategies are responsible for over 70% of US equity trading volume. These pressures push the rest of the capital markets in the same direction and the trend is unlikely to reverse.
On February 8th 2010, Apama announced that Banco Fator Corretora, a Brazilian bank and brokerage firm, has deployed the Progress® Apama® Algorithmic Trading Accelerator. Apama plays a critical role in Banco Fator’s new electronic trading strategy, enabling it to more effectively develop high frequency, proprietary trading tactics, achieve rapid customization, and perform low latency execution of trades on behalf of its buy-side clients. Banco Fator is also working with its clients to design customized algorithmic trading strategies that provide them significant competitive advantage, and the bank explicitly emphasized the importance of providing its clients with a fast method to enter the high frequency trading business.
Why so much emphasis on high frequency trading (HFT)? Reasons will differ among traders and regions, but a short primer on HFT and some ideas are here. The Brazilian market has expressed a strong opinion on the matter, with over 15 customers deploying Apama internally to automate execution and/or alpha-seeking strategies in the past year-and-a-half, with many further rolling out the platform to downstream clients.
So, do you have an opinion on HFT as well? What characteristics should a platform for HFT have to enable you to be more competitive? Let us know – leave a comment, or take our poll.
These days trading floors may have disappeared, but the prize still goes to the swift and nimble in the market. And as electronic trading has taken hold, firms with the fastest network and performance across all of the links in the trading chain will be at the head of the queue, able to react speedily to changing market conditions. Once measured in seconds, latency is now calculated in microseconds, and as markets continue to be volatile, speed of thought and execution remain paramount for many firms., Vijay Kedia Flextrade Systems – Read More
Zero latency is the optimal trading speed that all firms hope to be able to achieve at some point in their life. But until that can become a reality instead of a dream, there is a race to keep reducing latency from all the aspects of the trading process. This is from the server to the messaging to the sending and receiving data, and each piece must be optimized to reach its zero latency goals. For example there is a data center in Weehawken, NJ houses five major exchanges including: the New York Stock Exchange, Philadelphia Stock Exchange, and BATS Trading. This idea is a way to ensure there is almost zero latency built into the trade to those exchanges but not really the complete puzzle. Even though the data centers that host the exchange as a simple cross connect, is rarely the only exchange a firm is trading on at one time, so how do we close the cap? The solution is simple. All one needs is a carrier who can transport the data when latency and performance are important but not that critical at the moment. When the latency however reaches a level that is critical to your company’s success and for your strategic advantage, you made need to relook at your approach and consider a more agnostic approach. This allows you to work with each carrier and see which one is able to provide you their best solutions between locations. This however may not be the best solution if you have multiple desires and needs for this problem. In the race to Alpha, the combination of Proximity Hosting paired with Low Latency Transport is the Key to your companies success.
If you would like to read more on this topic please visit our CFN Services website.
Every Microsecond Counts Today brings modern technology and with it, an increasing number of Internet-based applications that require an end-to-end latencies, requiring the need latencies to be transmitted at a rate of milliseconds or even microseconds. Many applications though still demand that the latency remain stable, otherwise having little to none ‘jitter’. These new applications range from the popular multimedia services to things like voice-over-IP, multi-player gaming and even video conferencing. Since these applications are growing at such a successful rate, customers are placing just as increasing demands on operators to help provide and manage the networks needed to meet these new stringent demands. Unfortunately many of the tools that are currently available for use are not able to create accurate measures of the latencies in the magnitudes that are being demanded, nor can they even detect or localize any loss of spikes. This leads to a loss at extremely small time scales like tens of a microsecond.
Here is an example, a trading network that connects a stock exchange to the number of data centers where automatic trading applications run. In order to stop any unfair opportunities, network operations personnel must be able to ensure that the latencies between the exchange and each of the data centers are within 100 microseconds of each other.
This problem can be solved, just like many others by using current routers that typically support two distinct accounting mechanisms: SNMP and NetFlow. Each router cannot do the work all on its own, it needs the other to help pick up what it cannot. SMNP can only provide cumulative counters, which can be very useful when estimating load, however it cannot provide the latency estimates. On the other hand NetFlow can give samples and timestamps to help with all the receiving packets and also allows the company to get a calculating of the latency requirements from multiple routers.
Telecom networks and the LAN’s/WAN’s connected to them are extremely complex, so one should expect performance variances among different networks and implementations. The difference is largely based on the specifics of the network in question. However, an understanding of some of the drivers of latency can paint a useful picture to evaluate specific network performance.
CFN Services has announced it’s Financial Services Ultra-Low Latency Roadmap for Q1 2010
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