Aussie Telco Lays New Fiber For Microsecond Trading Boost

schliz writes "Australian data center and telecommunications provider Vocus has installed two new underwater fiber links across the Sydney Harbor in a bid for the lowest connection latency between the city's financial district and the Australian Securities Exchange's recently opened data center, north of the CBD. The project involved 1.6 kilometers of custom, 312-core single-mode optical fiber cable, and was expected to deliver a route that is 400 meters shorter than existing links. RTFA for pretty installation photos."

Comments

High-Frequency Trading

[Anonymous Coward]

Is there anything positive about high-frequency trading (which I assume is the reason for this link)? It seems HFT it is really only benefitting large banks and introducing a whole lot of stability problems in stock markets. And what exactly is the economical purpose of investing your capital in a company for a few milliseconds?

CAPTCHA: breakage

Re:High-Frequency Trading

[drsmithy]

Is there anything positive about high-frequency trading (which I assume is the reason for this link)?

On the grand scale ? No. It completely perverts the whole idea of "investing" and encourages nothing but speculation.

Re:High-Frequency Trading

[michelcolman]

Speculation? No, not at all. Speculation is at least on the seconds scale, not microseconds. Unless you mean "speculating that your algorithm doesn't contain any bugs". In that case, yes, it's pure speculation.

Re:High-Frequency Trading

[neyla]

Not really. Stock-exchanges should either just enforce once-a-minute matching (with lottery determining which trades to fulfill if there's several takers), or they should just set some minimal fee for every non-filled order which stands for less than a minute, 1% of the order-value would be plenty, probably even 0.1% of the order-value would be enough to stop HFT dead.

They're taking steps, some of them, but it's baby-steps. For example the Norwegian stock-exchange is adding a $0.01 fee for every trade - for those traders who file more than 70 orders for every *one* that goes trough, only orders which are withdrawn before 1 second has passed, are counted.

This is an *extremely* timid step. Make it $1, one in ten, and 1 minute rather than 1 second, and we're talking.

Re:High-Frequency Trading

[fredrated]

High Frequency Trading is the equivalent of 'shaving', the practice of shaving a small amount from gold coins, then passing the coins on. It produces nothing, it only steals from the flow of wealth.

Re:High-Frequency Trading

[guttentag]

The point is that the banks are playing a custom video game against each other with taxpayer money (assuming that if they screw up badly enough the government will bail them out) instead of points. Any advantages (in other scenarios these would be known as "cheats") they can get earn them real money in this game.

Eventually it's going to get to the point where they can't get any faster. Then they will have to resort to some variant of the Konami code to keep one-upping each other. You know, push the price Up, push the price Up, Short, Short, move your investment to the ticker symbol to the Left on the board, then the Right, Left again, then Right again, Bundle a bunch of securities together then Auction the pieces off. Oh wait, they already did that. Damn those guys are fast!

Not surprising

[ducomputergeek]

I have a friend who is a developer for a hedge fund where they pay him and a few others north of $250k each per year (it is NYC) to try and and shave milliseconds off transactions. They spend big bucks trying anything to reduce a transaction time from 4ms to 3ms or lower.

Re:Not surprising

[Datamonstar]

There was a good talk at Defcon about those networks. They can't afford to run any security, even as an afterthought and they are completely open with nothing but a dust-thin layer of obscurity covering them. All in the name of the dollar.

Re:Not surprising

[kanto]

I think the current recession proves that it is misguided to think it is all down to one sector of the economy.

The current recession was effectively created by the financial sector, otherwise it'd be over already. What they did was they leveraged some crappy loans into a global crisis and then they insured themselves by betting against those loans. The biggest heist in history was the fact that bailing out the insurance companies was basically the same as bailing out the institution who'd caused everything.

Atm. you cannot trust the financial sector, that's why we're still in this mess.

Interesting Risk Assessment

[Anonymous Coward]

From the article:

“It’s great to have [multiple paths], so if something did happen to the Harbour Tunnel, we’d be one of the carriers with capacity,” Spenceley told iTnews.

“It’s a one-in-a-million-year event but you just have to have it.”

But for nuclear power plants it's ok to only plan for 1 in 10'000 year tsunamis or so. But god forbid that trading link went down.

More money from the real into the virtual economy

[Errol backfiring]

Microsecond trading should be downright illegal. Instead of market fluctuations leading towards a stable price, market fluctuations are used to pump money out of the real economy into the virtual one. Nothing of value is added by such trade. Only real people are prevented from adding any value.

Re:Random delay legislation

[MichaelSmith]

Every transaction should be subjected to a randomised delay between 1 and 2 seconds . Problem solved, smart people can start doing something useful again.

Yeah like modelling the random number generator.

Re:looks like a..

[_merlin]

Definitely. Everyone who really cares about low latency is renting rack space colocated with the stock exchange at the site in Gore Hill. There is no point shaving 400m off the link to the CBD, as it will still be far poorer latency than running colocated. There's nothing in the CBD of significance that would make you want to run an application there vs in the colo.

Re:A waste of brains

[Rich0]

Yup. In the US it sounds like about 1 out of every 3 dollars in profit made is made by the financial services sector. That is a sector that basically does nothing but move money from point A to point B - they're the middle-men of the economy.

Don't get me wrong, efficient allocation of capital is valuable. However, can it really be said to be efficient if it consumes a full third of the entire US economy?

Re:More money from the real into the virtual econo

[Saint Fnordius]

If only it were true, but it ends up going into the bank accounts of the traders, who use it not to purchase goods and services but hoard it as a way of keeping score. A lot of the financial industry is only interested in competition on who can collect the most dollars.

The religion of the "free market"

[betterunixthanunix]

First of all, I seriously doubt that you want to remove all regulations on trading; you probably draw some of your confidence in the market from those regulations.

That being said, high-frequency trading is damaging to the economy, by any reasonable, non-religious measure. Profit from HFT is based entirely on the speed of one's computer; it has nothing to do with the information available to investors, it has nothing to do with optimizing your trading strategy (mixed strategies take too long to compute anyway -- HFT is based on executing a suboptimal strategy too quickly for anyone with a theoretically better strategy to compete), and it is not a useful form of arbitrage. HFT turns futures markets into negative sum games for investors who are looking to hedge risks and even for speculators, siphoning money away from people who are using futures contracts in productive ways and filling the pockets of people who are doing nothing productive.

HFT firms are parasites, nothing more. The sooner we get rid of them, the better.