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The Trading Mesh

Extending the #low-latency race from underground to the air

Thu, 26 Apr 2012 15:37:44 GMT           

Building microwave

Traditionally, high frequency traders seeking the fastest connections between markets have looked to fiber-optic networks. It’s been a largely successful endeavour. Latency between the markets of Chicago and New York has been cut as low as 13.3 milliseconds. But now, microwave radio technology is the uprising new star in the low-latency arena because traders are looking into wireless connectivity to cut extra milliseconds.

The pivotal focus is still to develop route between New York (the stock trading capital) and Chicago (the currency and options trading capital). The competition is extremely fierce as is usual case in the low latency race. For example, the New York based McKay Brothers is constructing a microwave network between the Big Apple and the Windy City. Cielo Networks, on the other hand, specifically targets the HFT market and their strong demand for point to point communications technology. NJ startup Low Latency Group is aiming to raise 5 millions from up to 8 trading firms in order to build a private NY-Chicago microwave radio network, only to be shared by the contributing firms.

As of now, application of microwave technology in the HFT space is still for the speed junkies. Due to its exposure to natural environment, such networks are falling far behind the traditional optical fiber in terms of resilience and stability. But for some, speed is the utmost key to winning the HFT trading war.

At the High Frequency Trading World Chicago conference, experts from proprietary trading firms and connectivity providers will discuss all viable options for the speed-hunger traders. Also there will be exciting demos in the exhibition hall to showcase the latest breakthrough in network and connectivity technology.

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