A New Transatlantic Cable… To Save 5 Milliseconds?

Seems worth it.

A Transatlantic Cable to Shave 5 Milliseconds off Stock Trades - Popular Mechanics

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.

via A Transatlantic Cable to Shave 5 Milliseconds off Stock Trades – Popular Mechanics.

Advertisements

Tags:

About Matthew Peterworth

I currently work as a Technology Specialist at Henderson Engineers in Kansas City – a Mechanical-Electrical-Plumbing (MEP) design firm. Prior to that I was a Project Manager for Information Technology Services (ITS), the central IT department at the University of Texas at Austin. As of July 2008 I am a Registered Communications Distribution Designer (RCDD) through BICSI. And as of June 2011 I am a licensed Professional Engineer (PE) in the great state of Texas. Please follow me on Twitter @mpeterworth. https://twitter.com/mpeterworth

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s