Welcome to the Slashdot Beta site -- learn more here. Use the link in the footer or click here to return to the Classic version of Slashdot.

Thank you!

Before you choose to head back to the Classic look of the site, we'd appreciate it if you share your thoughts on the Beta; your feedback is what drives our ongoing development.

Beta is different and we value you taking the time to try it out. Please take a look at the changes we've made in Beta and  learn more about it. Thanks for reading, and for making the site better!

Barbarians at the Gateways

CowboyRobot (671517) writes | 1 year,6 days


CowboyRobot (671517) writes "Former high-frequency trader Jacob Loveless gives an in-depth description of the math and technology involved in HFT. FTA: "The first step in HFT is to place the systems where the exchanges are. Light passing through fiber takes 49 microseconds to travel 10,000 meters, and that's all the time available in many cases. In New York, there are at least six data centers you need to collocate in to be competitive in equities. In other assets (foreign exchange, for example), you need only one or two in New York, but you also need one in London and probably one in Chicago. The problem of collocation seems straightforward: 1. Contact data center. 2. Negotiate contract. 3. Profit. The details, however, are where the first systems problem arises. The real estate is extremely expensive, and the cost of power is an ever-crushing force on the bottom line. A 17.3-kilowatt cabinet will run $14,000 per month. Assuming a modest HFT draw of 750 watts per server, 17 kilowatts can be taken by 23 servers. It's also important to ensure you get the right collocation. In many markets, the length of the cable within the same building is a competitive advantage. Some facilities such as the Mahwah, New Jersey, NYSE (New York Stock Exchange) data center have rolls of fiber so that every cage has exactly the same length of fiber running to the exchange cages.""
Link to Original Source

Sorry! There are no comments related to the filter you selected.

Impressive technology but what value does it add? (1)

monkeyFuzz (3398671) | 1 year,6 days | (#45168447)

The article provides a nice primer for the novice to the HFT domain. While the technical considerations are all very impressive I fail to understand how HFT actually adds value to society. If anything, flash crashes and other evils of HFT [] suggest to me the whole practice ought to be done away with. Sure there's lots of "economic activity" generated by buying and selling mind boggling amounts of assets in the blink of an eye but what use is it? Seems like the whole business is yet another leech sucking out money from the market without necessarily providing any useful in return (e.g. liquidity) that matters to all the other participants. The only thing that seems to have been perfected is the application of technology to do so incredibly efficiently.
Check for New Comments
Slashdot Login

Need an Account?

Forgot your password?