A New Transatlantic Cable… To Save 5 Milliseconds?
Seems worth it.
The first transatlantic cable to be laid in 10 years will not carry voice or Internet data. Instead, the line from New York to London will beam financial data to money marketers and hedge fund traders. And thanks to a shorter route than its competitors, the fiber optic cable will transmit information across the Atlantic 5 milliseconds faster….
The reason 5 milliseconds matters—and why beating that time lag could mean so much to a financial firm’s bottom line—is that high-frequency traders now automate many of their trades. Algorithms automatically execute sales and purchases based on triggers in financial data. Every trader has his or her own investment strategies, but the software often uses the same data. And as always in the world of trading, the first orders on the books are the first ones executed. With computers racing each other, a millisecond can place an order at the head of the line, before prices change as more algorithms place similar orders.