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-chica... 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/