Low-Latency Network Shaves Milliseconds from UK-Asia Traffic 157
New York's had its turn; now, an anonymous reader writes with this excerpt from eWeek Europe: "Financial traders and law firms are set to benefit from a new low-latency network between London and Hong Kong, which can conduct data on a round trip from Europe to Asia in around 176 milliseconds. The cable network, run by UK-based trading technology company BSO Network Solutions, has been in place for some time, but previously had to route around large parts of Russia, due to difficulties laying fibre in that country. However, a new lower latency and higher availability 'Transit Mongolia' connection has helped to reduce the time of a round trip by more than 20 milliseconds during the last 12 months."
Super-low latency trading Considered Bad... (Score:5, Interesting)
While it's very nice to have low-latency connections for lots of things, the current state of electronic trading means that even lower latency links are BAD for the world.
We're currently at a position where we give a HUGE advantage to those able to afford systems which can trade at lower latencies than others. Boiled down to it, that means the more wealth you have, the easier it is to create more wealth at the expense of those who don't have access to such super-fabulous systems and links. Basically, if I (some corp) can afford $100m in systems next to/in a trading center, I can make huge profits on arbitraging trades by even someone who has a $10m system slightly further away, and the ordinary human trader is screwed. None of that profit the mega-corp makes is economically useful activity (ask any economist) - they're simply leeches in the system, able to legally game it to their advantage (and, to everyone else' disadvantage, since trading is a zero-sum game).
From a societal standpoint, I see no benefit whatsoever at the current sub-10ms trading intervals, and the trend (which this new network link is a part of) to lower this even further for the privileged few bodes worse.
Sub-human-response-time trading is BAD for everyone except the trading floors (and their cronies, the investment banks), which live like leeches off of the financial system, sucking off profit from everyone else's trades (or, what do you think high-end arbitrage is?) It's also what leads us to those stupid market "storms" where automated systems jerk the trading around far faster than human can tell the computers are out-of-whack.
Bottom line - the tech this story promotes is great, but the primary purpose driving it isn't. We need to get a hold on the use of our technology.
-Erik
Why does it take 176 milliseconds to do that? (Score:5, Interesting)
Wolfram Alpha [wolframalpha.com] tells us that the direct path round trip by fiber would take 90 milliseconds. I'm rather impressed that it takes less than twice that to do the trip in reality, what with all of the additional routing delays and non-ideal paths that the data must take.