Slashdot is powered by your submissions, so send in your scoop

 



Forgot your password?
typodupeerror
×
Australia The Almighty Buck The Internet

Aussie Telco Lays New Fiber For Microsecond Trading Boost 212

schliz writes "Australian data center and telecommunications provider Vocus has installed two new underwater fiber links across the Sydney Harbor in a bid for the lowest connection latency between the city's financial district and the Australian Securities Exchange's recently opened data center, north of the CBD. The project involved 1.6 kilometers of custom, 312-core single-mode optical fiber cable, and was expected to deliver a route that is 400 meters shorter than existing links. RTFA for pretty installation photos."
This discussion has been archived. No new comments can be posted.

Aussie Telco Lays New Fiber For Microsecond Trading Boost

Comments Filter:
  • by Anonymous Coward on Friday June 15, 2012 @04:29AM (#40333015)

    Is there anything positive about high-frequency trading (which I assume is the reason for this link)? It seems HFT it is really only benefitting large banks and introducing a whole lot of stability problems in stock markets. And what exactly is the economical purpose of investing your capital in a company for a few milliseconds?

    CAPTCHA: breakage

    • by drsmithy ( 35869 ) <drsmithy@gm[ ].com ['ail' in gap]> on Friday June 15, 2012 @04:41AM (#40333063)

      Is there anything positive about high-frequency trading (which I assume is the reason for this link)?

      On the grand scale ? No. It completely perverts the whole idea of "investing" and encourages nothing but speculation.

      • by michelcolman ( 1208008 ) on Friday June 15, 2012 @05:03AM (#40333165)

        Speculation? No, not at all. Speculation is at least on the seconds scale, not microseconds. Unless you mean "speculating that your algorithm doesn't contain any bugs". In that case, yes, it's pure speculation.

      • by guttentag ( 313541 ) on Friday June 15, 2012 @08:33AM (#40334271) Journal
        The point is that the banks are playing a custom video game against each other with taxpayer money (assuming that if they screw up badly enough the government will bail them out) instead of points. Any advantages (in other scenarios these would be known as "cheats") they can get earn them real money in this game.

        Eventually it's going to get to the point where they can't get any faster. Then they will have to resort to some variant of the Konami code [wikipedia.org] to keep one-upping each other. You know, push the price Up, push the price Up, Short, Short, move your investment to the ticker symbol to the Left on the board, then the Right, Left again, then Right again, Bundle a bunch of securities together then Auction the pieces off. Oh wait, they already did that. Damn those guys are fast!
    • by neyla ( 2455118 ) on Friday June 15, 2012 @06:31AM (#40333463)

      Not really. Stock-exchanges should either just enforce once-a-minute matching (with lottery determining which trades to fulfill if there's several takers), or they should just set some minimal fee for every non-filled order which stands for less than a minute, 1% of the order-value would be plenty, probably even 0.1% of the order-value would be enough to stop HFT dead.

      They're taking steps, some of them, but it's baby-steps. For example the Norwegian stock-exchange is adding a $0.01 fee for every trade - for those traders who file more than 70 orders for every *one* that goes trough, only orders which are withdrawn before 1 second has passed, are counted.

      This is an *extremely* timid step. Make it $1, one in ten, and 1 minute rather than 1 second, and we're talking.

      • Finally!
        For every cent these HFT-basters make, a cent is lost to the normal investor, money fund or long time invested hopefull.
        They claim they are making values but the values come from someone else. What they are is abusing a system that was never ment to do this in the first place.
      • by mangu ( 126918 ) on Friday June 15, 2012 @12:04PM (#40336663)

        Markets are feedback control systems [wikipedia.org]

        I'm an electronics engineer and have had postgraduate courses on this. Any delay introduced in the feedback loop will tend to destabilize the system. HFT works fine, it provides liquidity to the market, it benefits everyone.

        BTW, I also derive most of my income today from trading stocks, not in a bank, but my own savings, trading from home. I'm perfectly satisfied with the way the system works.

        People who hate the market suffer from the same problem as those who hate people from a different race. It's prejudice caused by ignorance.

        To assume that traders are greedy people who only want to steal from you is the same as some Alabaman who believes blacks are lazy and stupid men who only want to rape white girls with their huge penises.

        The free market is a very positive force that benefits everyone. Look at North Korea for what will happen when there's no free market. Look at other third world countries to see what happens when markets are small and primitive.

        HFT is necessary because prices are not continuous amounts, they are broken at $0.01 intervals. To see how bad this is, imagine a share with a price in the single-digits cent range [yahoo.com]. This company really exists [tectoy.com.br]. If you could buy it at $0.01 you would have the perfect deal, it cannot go any lower and if it goes up you win at least 100%. According to my broker page, which I cannot link here, right now there are bids to buy 7882 million TecToy shares at $0.01.

        One cent is an extreme case, but this problem appears at any price. Prices are not an analog value, they are subject to effects coming from the gaps between the cents. HFT is a way to filter some of these problems through dithering [wikipedia.org]. This is the same principle that lets printers print gray scales with black ink, they print many very small black dots and varying the interval between the dots lets it show any value of gray.

        • by rustl ( 49621 )
          Bullshit!

          This would be credible if the HFT guys bought everything and waited for a buyer to come along, then sold at a modest profit. This would add liquidity.

          But they are not, they only buy when they know there is a real buyer in the market already, so they can get in and out quickly with their profit. As the buyer is already in the market they are not adding any liquidity that is not already there, they are just skimming.

          I'm an electronics engineer and have had postgraduate courses on this. Any delay

    • by Bengie ( 1121981 )
      The positive thing is that they'll lay all of this redundant ultra-low latency fiber, go bust at some point when it's finally regulated, then everyone will make use of lower pings.
    • by fredrated ( 639554 ) on Friday June 15, 2012 @07:38AM (#40333781) Journal

      High Frequency Trading is the equivalent of 'shaving', the practice of shaving a small amount from gold coins, then passing the coins on. It produces nothing, it only steals from the flow of wealth.

    • by dbIII ( 701233 )
      One method is really a currently legal version of the classic "man in the middle" attack. It's about working out that somebody is going to buy some shares, getting them first and selling them on before the buyer can complete a transaction with the initial seller.
  • !Length (Score:2, Insightful)

    by Anonymous Coward
    The speed of the link isn't due to the shorter length but bypassing all the other parties along the line and dedicated bandwidth. Bypass the queue.
    • by Bengie ( 1121981 )
      Are you sure? 400m in fiber is about 2.67 usec for light.

      299,792,458m/s/1,000,000usec=299.792458m
      400/299.792458m=1.3342563807926081983023068578997
      Light in fiber is closer to .55c, which is close enough to .5
      1.33*2=2.67us to travel 400m

      Queuing time would be in addition to the shortening.
  • Not surprising (Score:5, Informative)

    by ducomputergeek ( 595742 ) on Friday June 15, 2012 @04:32AM (#40333033)

    I have a friend who is a developer for a hedge fund where they pay him and a few others north of $250k each per year (it is NYC) to try and and shave milliseconds off transactions. They spend big bucks trying anything to reduce a transaction time from 4ms to 3ms or lower.

    • Re:Not surprising (Score:5, Informative)

      by Datamonstar ( 845886 ) on Friday June 15, 2012 @04:56AM (#40333127)
      There was a good talk at Defcon about those networks. They can't afford to run any security, even as an afterthought and they are completely open with nothing but a dust-thin layer of obscurity covering them. All in the name of the dollar.
      • So what are the hackers waiting for?

        • by AHuxley ( 892839 )
          If you get a few hours 'free' to loop and inject in the middle, they might test it and notice, then find your neat hardware splicing.
          So you can get physical access to the start point... no optical skills needed.
    • Ah, more evidence that the financial industry has been overtaken by the gamblers and card sharps. Only instead of counting cards at the blackjack table, they are gambling that milliseconds of latency will give them an edge over the rubes.

    • Only $250k for that work? Ridiculous. These people can make the company billions of safe reliable dollars. They aren't out there with the kind of risks that come from other forms of investment. Good technologists should be seeing the kind of money that traders make. Not what amounts to minimum wage in the most expensive city on the planet.

  • by Anonymous Coward on Friday June 15, 2012 @04:32AM (#40333035)

    From the article:

    “It’s great to have [multiple paths], so if something did happen to the Harbour Tunnel, we’d be one of the carriers with capacity,” Spenceley told iTnews.

    “It’s a one-in-a-million-year event but you just have to have it.”

    But for nuclear power plants it's ok to only plan for 1 in 10'000 year tsunamis or so. But god forbid that trading link went down.

    • by fa2k ( 881632 )
      I don't think that quote is an attempt at an accurate risk asessment.
    • I don't think it's as reliable as they think.

      Remember Christmas 2006? Heavy earthquake in Taiwan. Hong Kong got cut off from most of their Internet connections (other than local) for days, and it took weeks to be back to normal.

      There are several undersea cables between Taiwan and Hong Kong, over different routes. Now I don't know the size of Sidney Harbour but I have the feeling that the Taiwan Strait is a bit bigger. So those routes are further apart. Not a "single point of failure"? Think again: they were

  • by Errol backfiring ( 1280012 ) on Friday June 15, 2012 @04:34AM (#40333051) Journal
    Microsecond trading should be downright illegal. Instead of market fluctuations leading towards a stable price, market fluctuations are used to pump money out of the real economy into the virtual one. Nothing of value is added by such trade. Only real people are prevented from adding any value.
    • by u38cg ( 607297 )
      Willing seller, willing buyer. End of discussion.
    • It doesn't need to be illegal, we have a big enough government already, we need to remove laws, not make new ones! What we need is a new exchange, that only executes trades once per week, and another that only executes once per month. If your company is on this exchange you are not allowed to be on any others. Bam problem solved. If you need your money out early there is a fee based on the past volatility of the stock. No more flash crashes, much less speculation, invest in a company due to dividends a

  • . . . does that add more latency to the line? Can you measure actual versus expected latency to see if your undersea lines have been tapped?

    • Re: (Score:3, Informative)

      by niftydude ( 1745144 )

      . . . does that add more latency to the line? Can you measure actual versus expected latency to see if your undersea lines have been tapped?

      No - you can use something like a 1:99 optical splitter so they'll barely notice the signal drop, and will add about 5mm of optical fiber into the line, so they won't notice any additional latency (less than 20 picoseconds). Then run your 1% signal into an optical amplifier, say an EDFA [wikipedia.org], and snoop to your hearts content.

      • With the need for ultra-low latency, I imagine they'll be running these links without encryption so you can read every transaction that way. You might even be able to squeeze your own frames in during idle periods and make false transactions. Oh, what fun an attacker could have!
        • The reaction of the attacker should also be very fast, considering the actual orders are already done on a micro-second scale.So an attacker should react in a fraction of that time. Going to be tough.

  • by MM-tng ( 585125 ) on Friday June 15, 2012 @05:21AM (#40333223) Homepage Journal

    It is time to make a global law. Every transaction should be subjected to a randomised delay between 1 and 2 seconds . Problem solved, smart people can start doing something useful again.

  • by Wizarth ( 785742 ) on Friday June 15, 2012 @05:30AM (#40333243) Homepage

    Fiber for stock trading is considered good by all the government departments that had to OK this. But according to (one half of) our government, fiber is a total waste for everyone else in the country, and we should never need more then the mobile (cell phone) networks can provide...

    The dichotomy is impressive.

    • Yes, because the Liberal plan was all about relying on mobile infrastructure, and not rolling out entirely new, hi-speed wireless data...

  • by MichaelSmith ( 789609 ) on Friday June 15, 2012 @05:47AM (#40333283) Homepage Journal

    One guy on (IIRC) boing boing had a great suggestion about neutrinos. We can now transmit and recieve neutrinos and fire them directly through the Earth. If used to carry data, latency could be reduced by 3.14 (pi). A latency improvement of that magnitude would be important to some people, particularly between America and Europe.

    But unfortunately, such a system could not send information back in time.

    • by neyla ( 2455118 )

      You'd only reduce latency by a factor of pi/2 because signals going around only have to traverse *half* the circumference of the earth to arrive at the other end. (yes, they do it again to get back, but that applies to the direct route too!)

    • by Ksevio ( 865461 )
      They're pretty unreliable though. The tests where they were measuring them would send a huge burst of neutrinos in the hope that the detector would manage to detect just one of them. Would need to be a lot more accurate for a large amount of data to be sent through the Earth.
  • by indytx ( 825419 ) on Friday June 15, 2012 @05:47AM (#40333287)

    Sigh. Like the new transatlantic cable for high speed trading, another project created solely to shave off time on automatic trades and thus print money. Does this do anything? Am I the only one who sees this as driving up transaction costs because you have "investors" who really don't invest in companies trying to take almost microscopic profit automatically? Where is the benefit to the financial system? What about the economy? I wonder how long people would stand for an extra layer being added to some other industry that does nothing but get paid for doing nothing?

    These trades are like taxes, but they don't pay for any roads, health care, retirement, of national defense. They just make a few DBs who don't manufacture or invent anything rich. It will never happen, but I would like some politicians to get into an ethical debate on the socioeconomic benefits of this type of activity. Seriously. How defensible is this type of activity under Western Judeo-Christian ethical frameworks? Most American jurists publicly support natural law, at least while going through public confirmation hearings, so where exactly does this fit?

    • by Rich0 ( 548339 ) on Friday June 15, 2012 @06:02AM (#40333357) Homepage

      Yup. In the US it sounds like about 1 out of every 3 dollars in profit made is made by the financial services sector. That is a sector that basically does nothing but move money from point A to point B - they're the middle-men of the economy.

      Don't get me wrong, efficient allocation of capital is valuable. However, can it really be said to be efficient if it consumes a full third of the entire US economy?

      • US economy has this problem and many others, all created by the Federal reserve and Treasury, and thus by Congress and Senate and the White House starting from Theodore Roosevelt.

        But of-course at the end of the road there is the mob, and it's the mob that decides to vote the politicians in who promise shit that is impossible to deliver without ruining the economy, given the fact that the people who end up promising this stuff are crooks, who themselves want to get into power to steal it and the money that i

    • I can see problems for human speculators, but not for investors.

      An investor buys a stock now, to hold for a significant period of time (months or years), collecting dividend and hopefully sees the value of that stock increase. And the stock value is ultimately determined by the profit of the company that issued the stock.

      Does this micro-second trading lower the value of the stocks? It doesn't seem so because overall, over the long run, the bourses tend to go up. And so do stocks of all healthy companies. Co

  • Why don't they co-locate the trading server in the same server room?
    Or maybe in the same rack with the same switch?

  • by snero3 ( 610114 ) on Friday June 15, 2012 @06:06AM (#40333377) Homepage

    Any high frequency trader HFT, market marker, derivatives trader etc.... worth it's salt has already co-located with the ALC (ASX/SFE) data center in gore hill, if you are not interested in low latency trading with the ASX then why would you bother paying the extra $$$ for these lines when you can get a fiber line anywhere in sydney for $2K a month from pipe/TPG networks.

    • by Shatrat ( 855151 )

      As a fiber guy I would suspect that the latency angle is overblown and this is more for diversity or because existing fiber routes are fully utilized.

    • by Bengie ( 1121981 )
      One could have servers co-located at every exchange, but you still need to communicate among the servers somehow. Knowing what's happening at another exchange can also be useful, from each server's perspective.
  • by __Reason__ ( 181288 ) on Friday June 15, 2012 @06:08AM (#40333389)
    Strewth! This new cable sounds Bonza! Betcha it'll get that financial data across the drink faster than you can say "A dingo ate my baby"!
  • Microsecond greed is better.
  • by clickclickdrone ( 964164 ) on Friday June 15, 2012 @06:59AM (#40333595)
    In the UK, several banks spent millions building hugely fast data centres to allow high speed trading. Then one enterprising firm rented some rooms in the same building as the London Stock Exchange and essentially dropped a cable down through the ceiling from their servers to the Exchange servers. Made quite a bit of difference...
  • by fa2k ( 881632 ) <pmbjornstad.gmail@com> on Friday June 15, 2012 @09:07AM (#40334553)
    Speed of light in air is greater than in an optical fibre (glass) by a significant margin. Refractive index of dry air ~1, for glass ~1.5. Why can't they use a directed radio link, and use the fibre only as backup. Is it slower to modulate radio signals?
  • In December 2010 Frank Zhang of the Yale School of Management published a paper claiming that HFT accounted for 70% of the dollar trading volume in the U.S. capital market.

    David Woodcock, the Regional Director of the SEC, confirmed this number in a lecture I attended at the University of Texas at Dallas in May.

    As far as HFT reform goes, I think that ship has sailed. Or, quoting from the film "Giant": "You should have shot that fella a long time ago. Now he's too rich to kill."

Life is a whim of several billion cells to be you for a while.

Working...