RE: OT: high frequency trading

This has been done and re-done over and over. You can colo at the
exchange itself or there are probably a wealth of carrier hotels within
10ms of it. The bottleneck is almost always going to be the software
though. I haven't actually seen studies on this, but off the top of my
head I'm curious about the benefit of lowering latency from 15ms to say 2
or 3. The software can take 1 or 2 full seconds or more to do it's DB
calls and actually use the connection.

From:
"Joseph L. Brunner" <joe_at_affirmedsystems.com>
To:
Gregory Gombas <ggombas_at_gmail.com>, Anthony Bonilla
<anthonybonilla.ccie_at_gmail.com>
Cc:
"ccielab_at_groupstudy.com" <ccielab_at_groupstudy.com>
Date:
02/12/2010 10:54 AM
Subject:
RE: OT: high frequency trading
Sent by:
<nobody_at_groupstudy.com>

Actually most shops send the orders to different exchanges and black books
and of course arbitrage between the price differences they can exploit.
The can often find liquidity before anyone else knows it exists, and they
can send orders our for a very short time, of course pulling them if they
don't get the price they want...

It's kind of a nice study to work with these guys- they do eat the slower
players lunch (that may be software not just location based slowness).

Pretty much all the major players are already at the exchanges and
therefore you have to do it.

-Joe

-----Original Message-----
From: nobody_at_groupstudy.com [mailto:nobody_at_groupstudy.com] On Behalf Of
Gregory Gombas
Sent: Friday, February 12, 2010 9:17 AM
To: Anthony Bonilla
Cc: ccielab_at_groupstudy.com
Subject: Re: OT: high frequency trading

Tell them it won't matter anyway because whatever slight edge they
will get over their competitor by collocating at the exchange will
disappear once their competitor does the same :-)

On Thu, Feb 11, 2010 at 10:23 PM, Anthony Bonilla
<anthonybonilla.ccie_at_gmail.com> wrote:
> Hi all, I am back again. Have a question regarding high frequency
trading.
> We are planning on collocating at an exchange for trading and are
looking
> for doing lowest latency possible. I wanted to see if anyone else is
doing
> this and if there are any recommendations. I am currently thinking
about
> 4900M and nexus 5k (layer 2) but am interested in seeing what others
have
> done and whether there are any best practices from cisco to ensure that
we
> achive lowest latency. TIA.
>
>
> Blogs and organic groups at http://www.ccie.net
>
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Received on Sat Feb 13 2010 - 08:20:16 ART