WSJ highlighted the technologies and companies that keep High Frequency Trading companies in first place for fastest transaction execution. Metamako LP and Exablase Pty. Ltd. based in Sydney along with xCelor LLC in Chicago are making cutting edge switches that take only four nanoseconds to switch packets on layer 1, and 80 nanoseconds to multiplex, or combine packets. While leading Cisco Nexus switches report a latency of 1 microsecond or 1,000 nanoseconds.
How Fast is Fast?
How fast can these switches issue a securities order? The article mentioned in the amount of time light can travel from home plate to first base on a baseball diamond is the amount of time it takes to collect the orders and send them to the exchange. Can this new technology help you make large amounts of money in the blink of an eye? With HFT’s speed is everything when you’re clipping micro differentials in market value.
One Bottleneck Down, Two to Go
These switches solve that speed bottleneck within the HFT data center strategy according to Exablaze CEO Mathew Chapman. The Network cards in the servers, and the servers themselves can’t quite keep up with the superfast switches. Once these switches are installed, to get more speed, HFT’s will need new advancements in the HBA fiber network cards, or in the servers. Storage technology is quickly gaining speed thanks to the advancements in flash storage.
New Switches in, Old Switches Out
Why am I interested in these switches? Because I buy used switches, servers and storage equipment from HFTs. When they are ready to upgrade to the lowest latency available, I help liquidate the old equipment for the best price. Including getting the equipment out fast and wiped of any proprietary trading algorithms and records. With 26 years’ experience I make it easy to get the old out, and the new in.