The tower in question is the primary microwave relay into the ill-named “New York” Stock Exchange which actually is located just off MacArthur Boulevard and Route 17 in Mahwah, New Jersey, and is arguably the “most important tower” in the world, because without it, the financial industry, which these days means a few hundred thousands HFT algos and their math PhD creators, would grind to a halt as suddenly trading would revert back to the “caveman days” of 2007.<\/p>\n
Over the past several weeks there has been some furious work by engineers hanging off said tower some 100 feet in the air, resolutely adding a particular device to the primary microwave relay tower at the NYSE.<\/p>\n
What is said new device? Extremetech explains:<\/p>\n
High-frequency trading \u2014 the practice of making thousands of algorithmic stock trades per minute \u2014 is about to get a big boost in the USA. Anova, a company that specializes in deploying low-latency networks for stock trading, is completing an ultra-high-speed laser network between the New York Stock Exchange (NYSE) and the NASDAQ. The link will be just a few nanoseconds faster than the current microwave and fiber-optic links \u2014 but in the world of high-frequency trading (HFT), those nanoseconds could result in millions of dollars in profits for the trading companies. Such is the insanity of the stock markets; such is the unbelievable capacity of HFT to create money out of almost nothing.<\/p>\n
If you want to get a signal quickly from point A to point B, you basically have three options: fiber-optic cables, a network of microwave dishes, or laser links. Electrical (copper wire) networks are feasible over short runs, but their reduced functionality and bandwidth over longer runs makes them less desirable than fiber. Microwave (and even higher-frequency millimeter wave) networks also aren\u2019t very high-bandwidth, but because they\u2019re purpose-built, they can take a very direct route, significantly undercutting the latency of an oft-congested and round-about fiber network. Laser networks have all the advantages of microwave\/millimeter wave networks, but they have higher bandwidth, and some very clever adaptive optics means they\u2019re not impacted by bad weather. (Microwaves really hate inclement weather.)<\/p>\n
Last year Anova completed a laser network link between the London and Frankfurt stock exchanges, and now, it seems the company is nearing completion on a similar laser network between the NYSE and NASDAQ data centers in Mahwah and Carteret, New Jersey. In the case of both networks, Anova is using equipment provided by AOptix, an American company that is contracted by the US military to produce similar laser-based systems for ground-to-aircraft communications. Each AOptix base station is capable of \u201ccarrier-grade\u201d availability (five nines, 99.999%) over a distance of 10 kilometers (6.2 miles). The route, which is about 35 miles as the crow flies and skirts the center of Newark, will probably feature around six or seven base stations, each of which will have a direct line of sight with its two nearest neighbors. The link speed, according to the AOptix tech specs, will be around 2Gbps \u2014 not exactly massive by fiber-optic standards, but more than enough for a few thousand trades per second.<\/p>\n
The cost of building the network won\u2019t have been cheap \u2014 probably a few million dollars \u2014 but that\u2019s absolutely pennies for stock traders. (The new fiber link between London and Tokyo, which is also primarily for stock traders, will cost $1.5 billion.)<\/p>\n
The exact latency improvement of the NYSE-NASDAQ laser network isn\u2019t yet known, but over a distance of just 35 miles we\u2019re probably talking about nanoseconds. A microwave system currently in place between Chicago and NYC \u2014 a straight-line distance of around 800 miles \u2014 has a latency of 4.13 milliseconds. Scaling that down to 35 miles (dividing it by 23), you get a latency of 0.18 milliseconds between the NYSE and NASDAQ. I don\u2019t know how fast the existing fiber\/microwave links are, but even a difference of a few nanoseconds would be enough to beat out other high-frequency trading companies that are using older, slower networks. Anova, unsurprisingly, says it has dozens of trading firms who want to use the new laser network, all of which could stand to boost their profits. Though, as with all HFT technology, once everyone is using it (or something comparable) profit levels will revert.<\/p><\/blockquote>\n
Source: Zerohedge<\/p>\n","protected":false},"excerpt":{"rendered":"
The tower in question is the primary microwave relay into the ill-named “New York” Stock Exchange which actually is located just off MacArthur Boulevard and Route 17 in Mahwah, New Jersey, and is arguably the “most important tower” in the world, because without it, the financial industry, which these days means a few hundred thousands … Continue reading “The most important tower in the world”<\/span><\/a><\/p>\n","protected":false},"author":2961,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,123],"tags":[11113,11111,11112,7640,9073,1880],"class_list":["post-17898","post","type-post","status-publish","format-standard","hentry","category-news","category-world","tag-frankfurtm-tokio","tag-lasers","tag-nanoseconds","tag-stock-exchange","tag-trading","tag-wall-street"],"cc_featured_image_caption":{"caption_text":false,"source_text":false,"source_url":false},"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/praag.org\/index.php?rest_route=\/wp\/v2\/posts\/17898","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/praag.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/praag.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/praag.org\/index.php?rest_route=\/wp\/v2\/users\/2961"}],"replies":[{"embeddable":true,"href":"https:\/\/praag.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=17898"}],"version-history":[{"count":3,"href":"https:\/\/praag.org\/index.php?rest_route=\/wp\/v2\/posts\/17898\/revisions"}],"predecessor-version":[{"id":17901,"href":"https:\/\/praag.org\/index.php?rest_route=\/wp\/v2\/posts\/17898\/revisions\/17901"}],"wp:attachment":[{"href":"https:\/\/praag.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=17898"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/praag.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=17898"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/praag.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=17898"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}