High-Frequency Traders Use 50-Year-Old Wireless Tech

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High-Frequency Traders Use 50-Year-Old Wireless Tech

Posted by Unknown on Monday December 10, 2012 @05:04PM from the get-with-the-times dept.

jfruh writes "In the world of high-frequency stock trading, every millisecond is money. That's why many firms are getting information and sending big orders not through modern fiber-optic networks, but using line-of-site microwave repeaters, a technology that's over 50 years old. Because electromagnetic radiation passes more quickly through air than glass, and takes a more direct route, the older technology is seeing something of a renaissance."

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Great... by Mitreya · 2012-12-10 22:02 · Score: 5, Insightful

In the world of high-frequency stock trading, every millisecond is money
Always good to be reassured that the market reflects the intrinsic value of the companies instead of behaving as a high-tech casino.
1. Re:Great... by durrr · 2012-12-10 22:34 · Score: 5, Funny
  
  I was thinking more along the line of a foil-covered-blimp-in-the-middle attack.
2. Re:Great... by kasperd · 2012-12-10 22:39 · Score: 5, Interesting
  
  Always good to be reassured that the market reflects the intrinsic value of the companies instead of behaving as a high-tech casino.
  There is a reason why people who need numbers that are provably random, compute a hash value of stock indexes. Wall Street has build the world's most sophisticated (P)RNG.
  
  All these stories about traders needing ultralow latencies is a symptom of a fundamentally broken system. There are places where low latencies add value, stock trading is not one of them. Reduce the latency of everybody involved in the stock market, and nobody will have gained anything (except from the tech companies selling the technology being used).
  
  The system should be modified to be round based rather than real-time. 10 seconds per round is long enough that all traders can have equal access regardless of how far they are from the stock exchange, and it is short enough that it won't be a hindrance to long-term investors. A round could spend a couple of seconds executing the trades, then publish the results, add another couple of seconds for communication, and traders will still have six seconds for calculations before the deadline for the next trading round.
  
  With such a round based system you will change from competing on having the shortest distance to competing on having the best algorithms. Nobody will get an unfair advantage by having a shorter distance. Even if somebody does have one second more for calculations due to shorter distance, somebody further away can make up for that by a small increase in processing power. This is different from the latency based game, where no amount of processing power can make up for the additional latency.
  
  --
  
  Do you care about the security of your wireless mouse?
line of SIGHT by Anonymous Coward · 2012-12-10 22:05 · Score: 5, Informative

The traders who want to keep their jobs use line-of-SIGHT microwave transmission.
Have no clue what line-of-site is, but sounds like it doesn't transmit beyond the local building.
Assclown submitter and illiterate editor.
The worst sort of technological development by Anonymous Coward · 2012-12-10 22:10 · Score: 5, Insightful

When you have hundreds if not thousands of highly educated minds bent on squeezing out the very last drop of speed to facilitate an activity which is right up there with spamming in terms of societal benefit, well it strikes me as a tremendous and tragic waste. And yet this is what pays the bills. So: score it one point for capitalism. Yay.
It's line of CITE you stupid fucks by Anonymous Coward · 2012-12-10 22:38 · Score: 5, Funny

Jeez! due eye half too curect every-one round hear?
Re:where is the random? by durrr · 2012-12-10 22:49 · Score: 5, Insightful

Go read up what high speed algo traders are doing and you might change that opinion.
They are abusing their latency advantage by adding orders that they cancel microseconds later, and other manipulative events that siphons value from other traders.
Your truck analogy would be me selling you 1.5 ton gold, and being aware that you're going to drive 2000km and sell it at a profit, after selling it to you I phone my contact 2000kms away and have him sell another 1.5 ton gold at your target destination. When you arrive there, my contact have ruined your initial profit opportunity, and you're either stuck with no liquidity or can sell your 1.5 ton gold to my contact agent at a loss. So not only did I steal your opportunity, I decided to earn money off you by selling my gold to you at first for profit, and then buying it back, at profit again.
This is not about me having an 18 wheeler, it's about me being massively priviledged in both capital, resources and information flow and using it to vampire money from the efforts of others. It doesn't add value, or efficiency, it removes it and adds voltatility and risk to everything.
Re:where is the random? by Rockoon · 2012-12-11 00:09 · Score: 5, Insightful

..and then quickly recovers. You seem to want to leave that part out.

The only problem is when the SEC gets involved and undoes transactions to protect the automated traders from the massive losses incurred by their incorrect valuation.

--
"His name was James Damore."
Re:where is the random? by beaviz · 2012-12-11 00:19 · Score: 5, Informative

private account in the trading system that returns 3% PER DAY.
In other words. If she invest $1000 in her account, she will have $136.423.718 after two years of trading. Insane - or she might have been exaggerating.
($1000*1.03^400 = $136.423.718 (200 trading days per year))