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

Unknown Lamer posted about 2 years ago | from the get-with-the-times dept.

Businesses 395

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... (5, Insightful)

Mitreya (579078) | about 2 years ago | (#42248874)

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.

Re:Great... (2)

gagol (583737) | about 2 years ago | (#42248930)

Do not worry, some man-in-the-middle can fix that for us now that its all in the air!

Re:Great... (5, Funny)

durrr (1316311) | about 2 years ago | (#42248996)

I was thinking more along the line of a foil-covered-blimp-in-the-middle attack.

Re:Great... (2)

jamesh (87723) | about 2 years ago | (#42249030)

I was thinking more along the line of a foil-covered-blimp-in-the-middle attack.

RPG-in-the-middle attack would be even cooler!

Re:Great... (0)

Anonymous Coward | about 2 years ago | (#42249532)

A blimp is expensive. Toy aircraft towing some tinfoil - or even a tinfoil kite. Or have your quadrocopter lower tinfoil hats onto their microwave equipment . . .

Re:Great... (1)

Anonymous Coward | about 2 years ago | (#42249740)

How about a clutch of mylar balloons? these could be moored strategically.

Re:Great... (1)

AmiMoJo (196126) | about 2 years ago | (#42249570)

In all seriousness is there anything anyone could do if you owned an apartment in between two microwave antennas and decided to wallpaper it with tin foil?

For that if you lived between your neighbour and the mobile phone mast would there be anything to stop you wallpapering the back wall to block reception in their house? My guess is not since when T-Mobile stopped working they told me that someone's new flats were blocking the signal and I was SOL. Contract terminated, end of story.

here's the difference: (1)

Anonymous Coward | about 2 years ago | (#42249770)

Geithner & Bernanke didn't used to work for T-Mobile...

call me cynical but I suspect the reaction might be a little different if you DOS'd goldman's insid..., um, "high frequency" trading than if you affected _a_ vector to _a_ cell tower...

Re:Great... (1)

Guignol (159087) | about 2 years ago | (#42249660)

I'm not sure you can really make a man-in-the middle attack, the summary must be mistaken cause I don't think this technology is 50 years old.
This is "line of site" microwave technology, I suppose it allows them to communicate insanely fast from "sight to cite", that is to say, allowing them to spread information at the speed of rumor, the fastest known way to communicate in the universe. Any man in the middle attack attempt would add a noticeable lag.

where is the random? (1, Interesting)

mangu (126918) | about 2 years ago | (#42248972)

the market reflects the intrinsic value of the companies instead of behaving as a high-tech casino.

If it needs quick transmission of information, then it does reflect reality. It would be a casino if it depended on random factors, in which case no information transmission would be needed.

Haters gonna hate, but when you have infrastructure you can profit from economy of scale. If you want to profit you must invest, it's the reality of life.

The guy who has a dedicated link to the stock market will profit more than the guy who depends on his home broadband modem, same as the guy who has a thirty-ton eighteen wheeler will profit more from hauling cargo than the guy who depends on his 1.5 ton pick-up truck.

Re:where is the random? (3, Insightful)

Mitreya (579078) | about 2 years ago | (#42249034)

If it needs quick transmission of information, then it does reflect reality.

Oh it reflects reality, alright. But it is detached from the companies whose stocks the market is supposed to represent

It reacts to other people buying/selling -- a few flash crashes have already demonstrated that. One faulty algorithm accidentally dumps lots of stocks and the entire market goes into a tailspin (with no actual cause)

Re:where is the random? (5, Insightful)

Rockoon (1252108) | about 2 years ago | (#42249380)

..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.

Re:where is the random? (0)

saihung (19097) | about 2 years ago | (#42249524)

and then quickly recovers.
Right, but not without destroying millions of dollars in value, and sometimes much more than even that. And the SEC getting involved isn't a 'problem,' this is precisely what a regulatory authority is supposed to do.

Re:where is the random? (1, Informative)

Rockoon (1252108) | about 2 years ago | (#42249564)

Right, but not without destroying millions of dollars in value

Your argument hinges on this supposed destroyed value, so surely you can discuss this with a little more depth than simply making the claim, right?

And the SEC getting involved isn't a 'problem,' this is precisely what a regulatory authority is supposed to do.

The SEC is supposed to undo transactions because an HFT lost money? Really? Are you fucking retarded?

Re:where is the random? (0)

Anonymous Coward | about 2 years ago | (#42249850)

Sorry folks, the market had to shut down and trace where the "attack" came from. Go back and re-read the news about the flash crashes. the trading stopped, and the trace had to find out where the trades came from. No charges were made for the stopping of sales by the board, according to SEC articles. But "some unamed rogue firm"that had a microwave tower, aimed at the board interupt circuit"?,' injected millisecond trades, and sales, and puts. There are only a few places where your antenna could be put in the middle, where no translation would be needed, and only a few people work on the syswtem, so must be some poor slob who needs money, who could do that attack. So must be "friendly".

Re:where is the random? (5, Insightful)

durrr (1316311) | about 2 years ago | (#42249060)

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? (4, Insightful)

cristiroma (606375) | about 2 years ago | (#42249540)

Congratulations, great analogy! And I wonder, how is this legal?

Why is this legal? (2)

hoboroadie (1726896) | about 2 years ago | (#42249778)

Because of certain taxes that East Asian governments impose on financial transactions, high-frequency trading hasn't made such inroads there.

As long as our government continue to codify crimes into the financial system, the system will continue to act criminally. If we restored the former definition of the word "crime"* this problem (and many, many, many others) would simply not exist.
* novel concept- forbid crime.

Re:where is the random? (1)

Anonymous Coward | about 2 years ago | (#42249744)

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.

Not really. It is having the same information as you, so deciding to sell the gold faster. It is stealing from you in the same way that your truck is stealing from the donkey cart going by the same route.

It doesn't add value, or efficiency, it removes it and adds voltatility and risk to everything.

It shortens the time it takes for price corrections to happen, same as every other kind of trade. You might argue that the milliseconds is not worth how much people make on it, but you can't argue that it doesn't add value, unless you also say that having the correct price is not worth anything.

Re:where is the random? (0)

Anonymous Coward | about 2 years ago | (#42249792)

What if I find out (legally) that somebody is going to deliver 1.5 tons of gold 2000km away and are driving in a truck to deliver it. If I've invested heavily in airplanes, I could deliver 1.5 tons of gold to that person and beat the truck guy so when he arrives his opportunity is lost and has to sell it to me cheaper than I sold it to the target person. This is completely legal, and how the world works. I was smart investing in airplanes.

The person buying the gold is HAPPIER because they get their gold sooner. I'm happier because I did business. The loser is the truck guy. But he should lose because he is using worse technology. I'm sure all us tech guys can name numerous businesses which do things slowly that are being put out of business by company that can do the same thing faster and easier through better technology. Evolution.

Value of real world doesn't change in a microsec (3, Informative)

captainpanic (1173915) | about 2 years ago | (#42249110)

The main reason the traders want microsecond responses is to respond to each other, not to developments in the real world.

Once one trader buys shares, these change in value, which can trigger automated responses from all the other traders. And frankly, the combined algorithm of all these traders is what makes the market behave as it does. And that's so complicated that nobody can test it for every eventuality (also, the algorithms are secret). I can see that some people think that there is an element of randomness in that.

I think it is more like a double pendulum, or the butterfly effect. Science can explain what happened, looking back, but science cannot easily predict what will happen in a few minutes. It does have an element of randomness. It is not completely random, but to a layman it sure seems to be random.

Unfortunately, recent history has shown that the traders understand the market just as well as any layman. And that means this is just a form of gambling.

Re:where is the random? (4, Insightful)

SecurityTheatre (2427858) | about 2 years ago | (#42249176)

High Frequency trading is essentially the action of manipulating the system, constantly creating and destroying orders faster than others involved in the market.

By this, you can essentially become a man-in-the-middle for market transactions and skim a small amount off of each.

Additionally, many of the algorithms simply forge orders and then subsequently cancel them faster than the system can process them. What this does is basically slow down the system for everyone else, and create a lag that they can further take advantage of to skim off the top.

The major trading indicies are OK with this, because they are paid on a per-transaction basis, and happily collect their fraction of a cent from each of these high-speed traders.

In some low volume, they do represent increased liquidity in the market and they do bring buy-sell spreads down. This is why it was first allowed in the 1990s by the market makers.

Today, they represent something like 60%-80% of all market traffic and simply skim dollars off of trades. They invest big money in artificially delaying other people's transactions to manipulate the spread between a buy and sell order and to take advantage of market swings, because they can issue multiple buy-sell-buy-sell sequences before a single long-term buyer is capable of getting a single order in.

It is nothing more than a high-tech fraud... it appears to be legal right now, because nobody has decided to stop it and has many powerful billionaires behind it, but in the end, it's not much different than the scheme in Superman 2 or Office Space. Skim a quarter penny off every transaction and I guess nobody notices....

Re:where is the random? (3, Interesting)

SecurityTheatre (2427858) | about 2 years ago | (#42249224)

By the way, I spoke to a trader who writes these algorithms.

She (yeah, she) told me that she thought it was evil, but she is paid too well to say anything. She seriously makes a half million USD per year AND has a private account in the trading system that returns 3% PER DAY.

Yikes.

Re:where is the random? (2)

sco08y (615665) | about 2 years ago | (#42249396)

By the way, I spoke to a trader who writes these algorithms.

She (yeah, she) told me that she thought it was evil, but she is paid too well to say anything. She seriously makes a half million USD per year AND has a private account in the trading system that returns 3% PER DAY.

Yikes.

You're making that up.

Re:where is the random? (5, Informative)

beaviz (314065) | about 2 years ago | (#42249418)

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))

Re:where is the random? (0)

hoboroadie (1726896) | about 2 years ago | (#42249504)

Ambition is the root of all evil.
Nationalize the Fed.

Re:where is the random? (4, Insightful)

bill_mcgonigle (4333) | about 2 years ago | (#42249612)

"Now that we've established what you are, ma'am, it's simply a matter of negotiating the price."

Re:where is the random? (1)

bill_mcgonigle (4333) | about 2 years ago | (#42249626)

The major trading indicies are OK with this, because they are paid on a per-transaction basis, and happily collect their fraction of a cent from each of these high-speed traders.

That, and that the regulatory environment has locked in the incumbents to a cartel position so that it's impossible for a new market (say a fair market where orders can't be cancelled for 15 minutes) to compete. NASDAQ couldn't be started today.

Re:where is the random? (1)

Arancaytar (966377) | about 2 years ago | (#42249362)

Hauling cargo is actually of some use to the world.

Re:where is the random? (1)

mwvdlee (775178) | about 2 years ago | (#42249460)

If a millisecond latency difference matters, than random variation in transmission speeds would outweigh any value the information may hold.

Re:Great... (5, Interesting)

kasperd (592156) | about 2 years ago | (#42249028)

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.

Re:Great... (1)

dintech (998802) | about 2 years ago | (#42249206)

people who need numbers that are provably random, compute a hash value of stock indexes

What are you saying? That the stock market is random or that you can snapshot it and use it as a random seed? The first is wrong and the second as an actual implementation seems highly contrived and improbable. What kind of people are we talking about that would do this? The market seems like a rather arbitrary choice for this too when you could use 1000s of other measurable/sampleable things from within your code. Lets not even get started on all the design decisions you need to make to ensure that your hash generates truly random seeds from the plethora of values available to you in the market.

It occurs to me that there are two kinds of interested parties. Those who really, REALLY need true random sources and will probably buy appropriate hardware to do this. Then there's the rest of us for whom the wide range of pseudo-random algorithms already available is good enough without having convoluted and slow implementations like seeding from hashes of stock market values. It seems like a bit of a weird and esoteric choice when there are plenty of other good, simple and local options for random seeds. This mysterious third kind of programmer that feels inclined to do this probably needs a better grasp of both pseudo-random numbers and/or efficient implementations of random-number sources.

Re:Great... (1)

u38cg (607297) | about 2 years ago | (#42249330)

Umm, that's nice and all, but actually stock does not have to be sold through the stock exchange.

Re:Great... (1)

aaarrrgggh (9205) | about 2 years ago | (#42249874)

So then only the HFT companies will compete in the non-exchange trades. That, or someone desperate to buy or sell at an unfavorable price.

Re:Great... (2)

sco08y (615665) | about 2 years ago | (#42249416)

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.

Cite please. And if the cite says "we use the least significant digit of stock prices", I'm calling you full of shit.

Re:Great... (1)

Threni (635302) | about 2 years ago | (#42249498)

> The system should be modified to be round based rather than real-time.

Why? Leave it as it is - it's not hurting anyone. You, as a consumer, can still research companies, stock prices, forecasts etc, and decide to buy which stock you want. When you're ready, buy it. A few milliseconds won't make any difference if you're going to be holding stock for months/years. If people want to get involved in all this millisecond stuff leave them to it.

Re:Great... (1, Insightful)

AVee (557523) | about 2 years ago | (#42249070)

So true. High-frequency trading should be made illegal, like most things which just extract money from others without providing value in return.

Re:Great... (3, Informative)

locofungus (179280) | about 2 years ago | (#42249410)

How?

As a long term investor, if I want to buy, I buy at the current ask price, if I want to sell, I sell at the current bid price.

I depend on there being people who want to offer prices. They offer those prices because they think that they can match buyers to sellers. They make their money from the difference in bid and ask prices.

Make them slow down and they'll have to expand their bid/ask spread to allow for the fact that the market might move between them finding a seller and them being allowed to sell to a buyer.

Sure, by having small spreads, there are then people who think they can make money from short term price fluctuations, but they're making tiny amounts and therefore having to make huge trades. That's great for me because it means there's plenty of liquidity. Make the spreads wider and they'll disappear from the market - if shares have got to go up 5% to even break even on a trade then there won't be any day trading. But I'll be losing 5% on every deal as well.

There are abuses of the system. Most of them are already illegal but are either currently impossible to detect or there isn't an incentive to investigate them (or both). Fix that part of the system and HFT just becomes another way to invest that complements the long term investors who don't want to play a high adrenalin, high stakes game.

Tim.

Re:Great... (3, Funny)

sco08y (615665) | about 2 years ago | (#42249430)

So true. High-frequency trading should be made illegal, like most things which just extract money from others without providing value in return.

I doubt the government is going to make 98% of itself illegal.

Re:Great... (1)

xiando (770382) | about 2 years ago | (#42249606)

There is a simple solutions: Do not allow orders to be pulled before it's been on the exchange for 10 seconds. Right now ordres are placed and pulled dozens of times every millisecond. I do not consider an "order" which is pulled within a millisecond anything but noise and market manipulation.

Re:Great... (1)

dorre (1731288) | about 2 years ago | (#42249246)

This certainly a current and intersting subject. I wonder if someone care to enlighten me (and I suppose a lot of other people as well).

I am very uncertain why this millisecond trading is so important. What in the market makes this a viable way of doing business? Appearantly most bids in the market has a lifetime of 3 ms or less and are never realized. To me this seems like a way of manipulating the market. Personally I think available bids or offers should be secret. Only realized deals should be common information. This way it would not be possible to affect the market without cost. E.g. by leaving a bid or offer just to withdraw it milliseconds later.
Another thing I am uncertain off is how a buyer and seller is matched? When I leave an offer to buy shares for a specific price. What happens next? Anyway, I think these are important aspects to understand whether highfrequency trading provides a real value or not.

Re:Great... (1)

Rogerborg (306625) | about 2 years ago | (#42249302)

Casino is an interesting word, when one of the potential solutions (to these worthless parasites) is to introduce random delays to all transactions.

line of SIGHT (5, Informative)

Anonymous Coward | about 2 years ago | (#42248882)

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.

Re:line of SIGHT (0, Offtopic)

Intrepid imaginaut (1970940) | about 2 years ago | (#42248896)

Spellcheckers are responsible for this plague sweeping the internets. Someone clicks "autocorrect", thinks "good enough", and bam, another malformed post is hanging out for all the world to see. Language built civilisation folks, why do you hate civilisation?

Re:line of SIGHT (-1, Troll)

ae1294 (1547521) | about 2 years ago | (#42249008)

Spellcheckers are responsible for this plague sweeping the internets. Someone clicks "autocorrect", thinks "good enough", and bam, another malformed post is hanging out for all the world to see. Language built civilisation folks, why do you hate civilisation?

Honestly. we all just hate you and people like you. We hope that one day you will die from a stroke after reading one of our many posts...

Re:line of SIGHT (0)

Anonymous Coward | about 2 years ago | (#42249032)

Now you know how normal people feel towards aspie programmer types.

Re:line of SIGHT (1)

Anonymous Coward | about 2 years ago | (#42249316)

Spell chequers air response bell four this plaque sway ping thee internets. Sum won clicks "autocorrect", thanks "good enough", and bam, a nether mall fumed post is hang gin gout four awl there whirled two sea. Language billed civil eyes station folks, why do you Haiti civil eyes station?

Fixed that for you.

Re:line of SIGHT (1)

DamageLabs (980310) | about 2 years ago | (#42249024)

It's a new Webster word. A portmanteau of line-of-sight and on-site.

Last one out please turn of the lights.

Re:line of SIGHT (1)

Lorens (597774) | about 2 years ago | (#42249376)

Hmmm. Webster DOES have it, defined as "a straight line from the muzzle of an artillery piece to a target". Definitely "citation needed". Dictionary.com says origin 1905-1910. I have taken an instant dislike to the expression, based on perceived lack of usefulness, homophony with almost-synonym, and IMHO probable origin in the misspelling of said synonym. Webster tells me to "like" it on Facebook; if there was a Facebook "dislike" I'd even consider signing up for a Facebook account.

Re:line of SIGHT (1)

Neil Boekend (1854906) | about 2 years ago | (#42249426)

In this case it seems to mean that you should shoot the receiving antenna's.

Re:line of SIGHT (1)

Anonymous Coward | about 2 years ago | (#42249226)

Line-of-sight means that the microwave-relay towers are aligned perfectly so that the transmitting dish lines up with the receiving dish for every pair of towers. These may be on roof-tops, hills or mountain peaks. Not a good idea for people to walk in front of them.

The most iconic example is the BT tower in London
http://www.mds975.co.uk/masts/bt_tower.html

The LEGO model one has more detail:
http://images.wikia.com/lego/images/a/af/Lego_BT_Tower.jpg

Re:line of SIGHT (0)

Anonymous Coward | about 2 years ago | (#42249250)

Cable?

Here comes the rain again (0)

Anonymous Coward | about 2 years ago | (#42248890)

Falling on the profits like a tax audit,
Falling on the profits like we've just gone broke ...

Somebody else can take this and run with it; I'm tapped out. Yes, I know I'm being a wet blanket; guess the site will have to plumb new depths ...

The worst sort of technological development (5, Insightful)

Anonymous Coward | about 2 years ago | (#42248900)

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.

Re:The worst sort of technological development (3, Insightful)

Mitreya (579078) | about 2 years ago | (#42249056)

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.

It is only sad that people are working to squeeze more speed from the transmission speed
The truly tragic part is that people get an edge by buying server rooms closer to the stock market to win a few picoseconds

That's like paying $100 bucks to the dealer to be able to see other guy's hand in a poker game.

Re:The worst sort of technological development (1)

jtownatpunk.net (245670) | about 2 years ago | (#42249394)

Actually, it's nothing like that. Not even remotely. The dealer does not have that information so it would do no good to give them $100.

Re:The worst sort of technological development (1)

The Master Control P (655590) | about 2 years ago | (#42249344)

It truly pains me to see so many people who should've been my colleages some day, contributing to society's knowledge of the world, doing this instead.

What. A. Tragic. Waste.

Re:The worst sort of technological development (1)

mwvdlee (775178) | about 2 years ago | (#42249548)

And yet this is what pays the bills.

That's kind of the problem; it DOESN'T pay bills. Or atleast, it doesn't pay any additional bills.
HFT does not add any value to the market, therefore they do not increase the amount of bills that can be paid as a whole.
They extract money from a system at the cost of other parties involved; the traded companies, long term investors, pension funds, etc.

Always the worst sort of technological development (1)

hoboroadie (1726896) | about 2 years ago | (#42249576)

I think this is where some of the money went that isn't paying the bills.
Clearly some people can't be trusted with our money.
I suggest we quit letting them play with it.

Re:The worst sort of technological development (-1, Flamebait)

jimbolauski (882977) | about 2 years ago | (#42249864)

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.

So what would be your solution, to have the government regulate how often people can trade? I'm sure that there will be no problem with that kind of regulation or that people will find a way around it. Or would you just prefer that the government owns all assets, then nobody has to worry about making profits because the government will make all the right decisions.

'line of site' sic (4, Funny)

flyingfsck (986395) | about 2 years ago | (#42248916)

line of sight
Must be the publiek skool edumakashun.
I think this poor child was left behind.

Re:'line of site' sic (0)

Anonymous Coward | about 2 years ago | (#42249014)

To be fair, the article makes the same mistake, too.

Re:'line of site' sic (1)

Bearhouse (1034238) | about 2 years ago | (#42249158)

Multiple editing failures, lazy cut & paste. Error was just copied from original article.

Microwave technologies have been in use for point-to-point connections for decades by the military and by broadcast television stations. Point-to-point wireless microwave transmissions, which operate in the 1.0GHz to 30GHz part of the spectrum, require line of site, though signals can be repeated along the route. A good signal -- such as between two mountaintops -- can travel as much as 300 kilometers, or around 186 miles.

Re:'line of site' sic (1)

Crimey McBiggles (705157) | about 2 years ago | (#42249690)

There's a little mark that looks like this: [sic] Learn to use it.

50 Year old tech (2, Insightful)

Anonymous Coward | about 2 years ago | (#42248920)

Just like Hungry Jacks (Burger King) uses 50 year old tech to heat my burgers.

TFA slightly out of date (1)

Anonymous Coward | about 2 years ago | (#42248944)

> These days, the largest microwave link can offer only 150Mbps, though work is being done to develop gigabit microwave technologies.
150Mbps is past. 300 - 600Mbps is common. Gigabit has been reached already.

Re:TFA slightly out of date (1)

Anonymous Coward | about 2 years ago | (#42248968)

I think that's done by combining 4 OC-3 radios. TFA is probably talking about individual bands. If you're talking about a link as-in aggregating bands, then you can get much more than 600Mbps.

Re:TFA slightly out of date (1)

Rockoon (1252108) | about 2 years ago | (#42249428)

If you are talking about off-the-shelf solutions, then gigabit microwave is a happening reality. More than a few companies are more than happy to sell you (and the government) the stock equipment they offer for this. Just search the web for 'gigabit microwave backhaul' and MULTI-gigabit speeds will be in your face.

It's line of CITE you stupid fucks (5, Funny)

Anonymous Coward | about 2 years ago | (#42249026)

Jeez! due eye half too curect every-one round hear?

Re:It's line of CITE you stupid fucks (4, Funny)

Anonymous Coward | about 2 years ago | (#42249458)

It's line of CITE you stupid fucks

[Sightation required]

High-frequency trading doesn't benefit the economy (1)

ickleberry (864871) | about 2 years ago | (#42249042)

Only serves to make shares more volatile. Why is this sh1t allowed again? also why when a group of ordinary private individuals find a way to exploit the HFT algorithm's of the likes of Goldman Sachs do they get sent to jail and not the high-frequency traders themselves? Messed up world we live in.

Re:High-frequency trading doesn't benefit the econ (1)

Anonymous Coward | about 2 years ago | (#42249236)

You've got it backwards: HFT reduces volatility and decreases the spread.

Re:High-frequency trading doesn't benefit the econ (1)

The Master Control P (655590) | about 2 years ago | (#42249366)

You really think algorithms that feed off of and fight each other on microsecond timescales, placing and then shorting more orders for shares of companies than exist in the entire world, reduce volatility?

Re:High-frequency trading doesn't benefit the econ (4, Informative)

Rockoon (1252108) | about 2 years ago | (#42249502)

You really think algorithms that feed off of and fight each other on microsecond timescales, placing and then shorting more orders for shares of companies than exist in the entire world, reduce volatility?

I know for a fact that HFT's reduce the spread between BID and ASK because numerous studies have been done showing empirically that this is the case. This means that all the people that cry that they are "siphoning money off the market" and other such crap are full of shit. You are getting better BID's and ASK's because the HFT's are in the market, therefore their percentage of the transaction is just a few for a worthwhile service.

Here is one citation [wiley.com] and if you want the PDF, try here. [afajof.org]

The New York Stock Exchange automated quote dissemination in 2003, and we use this change in market structure that increases AT as an exogenous instrument to measure the causal effect of AT on liquidity. For large stocks in particular, AT narrows spreads, reduces adverse selection, and reduces trade-related price discovery. The findings indicate that AT improves liquidity and enhances the informativeness of quotes.

Data and facts trumps FUD every day of the week in my book.

Re:High-frequency trading doesn't benefit the econ (0)

Anonymous Coward | about 2 years ago | (#42249446)

Because it's a *fabulous* way to launder money and hide the insider trading inherent in the modern stock companies. By pre-skewing the algorithms in favor of companies built into their "sophisticated models", which are generated by systems too complex to directly analyze, they can bury *billions* in insider trading profits and launder similar billions from "investors" who lose enough to help balance the books and keep the SEC from thinking their profits are outrageous. And they get to skim off the top the whole time in transaction costs.

Re:High-frequency trading doesn't benefit the econ (1)

prefec2 (875483) | about 2 years ago | (#42249462)

It is allowed, because those who do it can make a lot of profit. And profit made counts as GDP. GDP is the measure for the wealth of you country. While it is totally bogous today, it is still used as the main measure. And the measure indicates that reducing the opportunity to make profits on finance markets will reduce the GDP which will reduce the wealth of y country. No politician wants that. Furthermore, a lot of people previously working for the finance industry are now in government positions in the USA, in Germany, in the UK, in France, in Italy (at least at the moment), in Spain and in the EU. They all are not interested in stopping the game, they played before. That would be something between telling an Junky not to fix and the Pope to become a muslim. Therefore, this will not change any time soon. It even survied the last crash.

That's nothing (0)

Anonymous Coward | about 2 years ago | (#42249054)

3D printers use hundred year old tech of gears and rods.

Re:That's nothing (0)

Anonymous Coward | about 2 years ago | (#42249336)

And normal printers use thousand year old tech of ink!

In other news... (0)

Anonymous Coward | about 2 years ago | (#42249058)

High Frequency Traders are using technology dating from the 2nd century BC during their toilet breaks.

"Without this fantastic ancient technology I would not be able to tweak my trades as my dirty ass would be disturbing my control of the process."
-- Tommy Asswipe (Trader)

More @11:00...

Get closer (2)

edjs (1043612) | about 2 years ago | (#42249156)

If your orders have to transit hundreds of km, whether it's at 3e8 or 2e8 m/s, you're already at a disadvantage compared to those that have their servers co-located with or next door to the exchange's servers.

Re:Get closer (3, Insightful)

Shimbo (100005) | about 2 years ago | (#42249232)

Arbitrage between different exchanges..

Re:Get closer (2)

Rockoon (1252108) | about 2 years ago | (#42249522)

Indeed. There are a couple of companies with plans to set up shop directly in the middle of the ocean in order to maximize arbitrage opportunities between exchanges.

Dressing gowns (1)

docilespelunker (1883198) | about 2 years ago | (#42249178)

Lazy, lazy, lazy. If they gout out of their dressing gowns and actually went to the office, then they wouldn't need all this fancy stuff to do the trades.

Dammit (1)

fa2k (881632) | about 2 years ago | (#42249304)

I should have patented [slashdot.org] it back in June ;)

Next step... (1)

Issarlk (1429361) | about 2 years ago | (#42249328)

You know what's even faster ? Microwave travelling in long tunnels travelling straight between points on the surface of earth.
I'm sure some of these guys are considering it!

So... (0)

Anonymous Coward | about 2 years ago | (#42249384)

Everyone is noticing the spelling, but not the fact he's saying that electromagnetic radiation - not light - travels through fiber optic cables?

Re:So... (0)

Anonymous Coward | about 2 years ago | (#42249866)

Visible light is an electromagnetic wave. It's just in a different frequency than a microwave signal.

Many years ago.... (3, Informative)

hughk (248126) | about 2 years ago | (#42249386)

I was involved in establishing one of the first major Electronic Markets in Germany. The country was quite decentralised with regional financial centres so we made sure that everyone communicated with the exchange (situated in Frankfurt) at the same speed. We even had line simulators to ensure that users in Frankfurt saw similar response times to users in Hamburg.

Now exchanges are more or less forced to join the race for the bottom by offering co-lo services (rackspace in the Exchange) where you are just a LAN switch away from theeExchange infrastructure. If you don't support that, the alleged "liquidity" moves to another exchange. Inside the machines, the algorithms are now run on the graphics cards (cheap multiprocessing) so they can run evven faster. Others use custom signal processing hardware.

Users actually issuing buy or sell orders to hold are never that close, the decision making happens within the institution not in the Exchange building. The "algo" machines just act as a man in the mmiddle driving prices to their advantage. Also, the algo traders are imposing a massive load on the order book and matching code within the exchange's systems. generally speaking the systems were chosen for reliability rather than pure speed.

Re:Many years ago.... (0)

Anonymous Coward | about 2 years ago | (#42249476)

If you are a rack switch away from the exchange's computer, you are too far. 1ms is too much latency.

You need to be a virtual appliance on the same virtual host, with read-only access directly to shared memory space on the host where trades are processed.

10 seconds per order should be law imho (4, Interesting)

xiando (770382) | about 2 years ago | (#42249398)

I have long argued that stockmarkets should have a 10 second order freeze. That would mean that if you place an order to buy a stock at a given price then you can't remove that order for a whole 10 seconds, you have to stand by your order for that amount of time.

Thousands of orders are placed and pulled every second, even every millisecond. There is a steady flow of orders being placed and pulled.

Consider this: Is an order to buy or sell a stock which is pulled within a millisecond a real order, or is it just market manipulation?

Re:10 seconds per order should be law imho (0)

Anonymous Coward | about 2 years ago | (#42249482)

If it matches it executes so it would appear to be a real order.

Re:10 seconds per order should be law imho (1)

mwvdlee (775178) | about 2 years ago | (#42249580)

I'd go with a much, much longer delay than 10 seconds (more in terms of hours or days), but the reality is that even adding 1 second would help. Even better if the delay was random.

Time for FOPDOS? (1)

fgouget (925644) | about 2 years ago | (#42249434)

Time to train flocks of pigeons to fly in the path of the microwave links? That's sure to disrupt their latency when they have to retransmit due to packet loss... One could call this Flock Of Pigeons Denial Of Service.

We might be able to use this ... (0)

Anonymous Coward | about 2 years ago | (#42249508)

If we can get wall street CEOs to read Ender's Game or watch Star Trek, we could have ansibles or subspace communication in no time.

FPGA's replacing both fiber and microwave (2)

Antique Geekmeister (740220) | about 2 years ago | (#42249534)

The whole field of transmitting the high-frequency trading information seems to be going away in favor of FPGA's sitting right on the fiber leaving Wall Str.

          ftp://ftp.bittware.com/documents/data_sheets/ds-hft.pdf [bittware.com]

By putting these sorts of devices directly on leased connections from the stock market, adjacent to the stock market, they eliminate the need for the extremely expensive and often quite unreliable remote high speed connections. I was recently privileged to hear a presentation on the risks of data loss on those lines: they're apparently using multicast for high speed synchronoous transmission, But by the time you've checksummed and re-assembled your data and re-collected the lost packets, it can actually be _slower_ than normal TCP, and the the data verification technologies are often poorly tested.

The key to using the FPGA's is to tune and simplify the models that are stored and processed locally, in place of the expensive remote data centers. And updating those devices doesn't require the low latency and high speed: the analysis of stored data and updates of models can be done remotely and much more slowly.

did microwave ever go out of style? (1)

MickyTheIdiot (1032226) | about 2 years ago | (#42249746)

I am really confused here... why this is being talked about like it is ancient tech that's been forgotten?

I used to be the admin of an outdoor recreational center and I've personally used microwave bridges a lot for these sorts of applications. It's very common in rural areas to do use microwave or open spectrum in areas where you can't just dig and put down fiber or cable. It doesn't surprise me in the least that it's being used in applications like this.

WiFi Is Microwave (0)

Anonymous Coward | about 2 years ago | (#42249890)

WiFi is Microwave.

OMFG! Head asplode.

50 Year Old Wireless Tech (0)

Anonymous Coward | about 2 years ago | (#42249820)

Great article .

Have a nice one http://youtu.be/ov8FeODxyXU

Line of Sight & Reason for Wireless (0)

Anonymous Coward | about 2 years ago | (#42249844)

The reason why they're saying it's line of sight is because the transmission occurs from tower to tower to span vast distances. Line of sight is used (obviously) because of spectrum congestion. The companies transmitting such data must get approval and the bandwidths are very large. In general this technology is used to transmit data between New York and Chicago. There are numerous fiber connections dedicated to this task currently, but the information travels at only ~0.7c; thus, wireless transmission can shave off a couple microseconds during the transmission. The technology to transmit the information wirelessly is not 50 year old technology; it is very cutting edge. The key part is keeping the latency low for during encoding and decoding at each tower such that the total latency is less than transmitting the information over fiber.

In any case, the using FPGAs at the stock market does not resolve the need to transmit the information to other markets. That is addressing a different problem.

Obvious... (0)

Anonymous Coward | about 2 years ago | (#42249860)

"Because electromagnetic radiation passes more quickly through air than glass"

The only time I see glass moving through air is when I drop a beer glass (not yet to see a car crash with unstrapped passengers) - I wonder how they compared radiation/glass speed through air?

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