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Re: Hi speed trading - hi speed monitoring
From: Craig <cvuljanic () gmail com>
Date: Fri, 17 Feb 2012 15:10:50 -0500

Some longer term players, will use delayed data as they are trading longer
term, and dont care too much so if the orders were delayed a bit more,
these players most likely wouldn't care/notice.

But also you have to consider, there are a large degree of shorter term
players, who are in/out of the market and play both sides, these do have
real-time data feeds, and do care about latency. Some shops go as far as to
only use a certain length patch cables from their trading PC to the switch
port they are connected to. Also consider when news releases are announced,
the markets often do move quite fast, and a LOT of money can be made/lost
in seconds, so delaying the orders, could and would affect the outcome of
the trades.

Also consider that a vast majority of the trades are automated by
computers, and some want their servers setup as close to the exchange as
possible, in fact the CME group released that they will offer/lease data
center space:

"One such project is a 428,000-square-foot data center in the western
suburbs of Chicago opened by the CME Group, which owns the Chicago
Mercantile 
Exchange<http://topics.nytimes.com/top/reference/timestopics/organizations/c/chicago_mercantile_exchange/index.html?inline=nyt-org>.
It houses the exchange’s Globex electronic futures and options trading
platform and space for traders to install computers next to the exchange’s
machines, a practice known as co-location — at a cost of about $25,000 a
month per rack of computers."

http://www.nytimes.com/2011/01/02/business/02speed.html?pagewanted=all

http://www.datacenterknowledge.com/archives/2010/08/23/cme-group-opens-chicago-trading-hub/







On Fri, Feb 17, 2012 at 2:47 PM, Kiriki Delany <kiriki () streamguys com>wrote:

Why not just simultaneously settle all trades at the same time? Once every
minute, or every 5 minutes, or per day?

There are many solutions to the problem. I'm sure those that can take
advantage of the latency don't want the solution.


Kiriki Delany

-----Original Message-----
From: Leo Bicknell [mailto:bicknell () ufp org]
Sent: Friday, February 17, 2012 10:54 AM
To: NANOG
Subject: Re: Hi speed trading - hi speed monitoring

In a message written on Fri, Feb 17, 2012 at 01:36:35PM -0500,
Valdis.Kletnieks () vt edu wrote:
Am I the only one who thinks that if network jitter can make you fall
outside the acceptable price window, maybe, just maybe,  the market is
just too damned volatile for its own good?

I've had an interesting discussion with some financial heads about a simple
idea.

What if the exchange, on every inbound trade, inserted a random delay, say
between 0 and 60 seconds, before processing it?

Almost all of this computer based, let's be closer to the exchange stuff
becomes junk, immediately.  Anyone "long" (where long is probably more than
10 minutes, with a 60 second jitter) in a security wouldn't notice.

I mean, if the general public has to get 15 minute delayed quotes so they
don't manipulate the market, shouldn't the big guys? :)

--
      Leo Bicknell - bicknell () ufp org - CCIE 3440
       PGP keys at http://www.ufp.org/~bicknell/





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