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."
Re:looks like a.. (Score:2, Insightful)
Not according to the politicians who were bought.
High-Frequency Trading (Score:5, Insightful)
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
!Length (Score:2, Insightful)
Interesting Risk Assessment (Score:5, Insightful)
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.
More money from the real into the virtual economy (Score:5, Insightful)
Re:High-Frequency Trading (Score:5, Insightful)
On the grand scale ? No. It completely perverts the whole idea of "investing" and encourages nothing but speculation.
Re:High-Frequency Trading (Score:5, Insightful)
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.
Re:More money from the real into the virtual econo (Score:4, Insightful)
It's not just disappearing down a black hole, it's part of the same economy as the rest of us.
Actually, that's not true anymore. Take a look at how much consumer goods people buy all the time. Now think for a while how many people actually make all those consumer goods and where. The thing is, it takes just a few thousand people to manufacture enough units of the same goods for the whole world.
So yes, from our point of view, money is disappearing down a black hole. The black hole just contains a significant part of the world economy (in terms of money, not people). Some money leaks back from the black hole through employee wages but those money leaks are not as evenly distributed across the world as money suction. Do you still think that some areas can't be sucked dry?
Re:looks like a.. (Score:5, Insightful)
Definitely. Everyone who really cares about low latency is renting rack space colocated with the stock exchange at the site in Gore Hill. There is no point shaving 400m off the link to the CBD, as it will still be far poorer latency than running colocated. There's nothing in the CBD of significance that would make you want to run an application there vs in the colo.
Re:More money from the real into the virtual econo (Score:4, Insightful)
"Trickle down" is fine in theory. In practice, the smart new money goes where the smart old money went: appreciating assets like old art, old land, old bricks and mortar.
That's mostly a closed loop where the same goods go round and round for higher and higher prices. People rarely "cash out" and spend the profits on new things that drive demand.
Re:A waste of brains (Score:5, Insightful)
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?
Re:Not surprising (Score:5, Insightful)
I think the current recession proves that it is misguided to think it is all down to one sector of the economy.
The current recession was effectively created by the financial sector, otherwise it'd be over already. What they did was they leveraged some crappy loans into a global crisis and then they insured themselves by betting against those loans. The biggest heist in history was the fact that bailing out the insurance companies was basically the same as bailing out the institution who'd caused everything.
Atm. you cannot trust the financial sector, that's why we're still in this mess.
Re:More money from the real into the virtual econo (Score:5, Insightful)
If only it were true, but it ends up going into the bank accounts of the traders, who use it not to purchase goods and services but hoard it as a way of keeping score. A lot of the financial industry is only interested in competition on who can collect the most dollars.
Re:Not surprising (Score:2, Insightful)
Or are we sweeping the rampant profligacy of governments over the past 20 years under the carpets because it doesn't gel well with this hang-a-banker sentiment?
If you want to blame everything on a bunch of guys who were acting inside the rules and regulations they were told to abide by, that's fine. But the real damage was done by incompetent legislators and regulators who failed to pay attention and adequately oversee the industry they were charged with.
And that's not even touching the mass market of morons who thought there was nothing intellectually challenged about taking on a mortgage several times their salary to pay for a house and then several credit cards to pay for all the amenities that were far beyond their modest means. It cuts both ways. Banks and the financial industry are by no means blameless, but the argument that they are entirely to blame for the world's current economic woes is not only specious, but a blatant scapegoat that the uninformed masses have been happy to bleat about for long enough now.
Re:High-Frequency Trading (Score:5, Insightful)
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.
Re:High-Frequency Trading (Score:4, Insightful)
Maybe stock market transactions should require a CAPTCHA. No human intervention, no purchase/sale. (There could be exceptions for stuff like limit orders, which have a long history and aren't that open to abuse - in this case the CAPTCHA would be at the time of placing the order, not the time it's executed.)
The religion of the "free market" (Score:5, Insightful)
That being said, high-frequency trading is damaging to the economy, by any reasonable, non-religious measure. Profit from HFT is based entirely on the speed of one's computer; it has nothing to do with the information available to investors, it has nothing to do with optimizing your trading strategy (mixed strategies take too long to compute anyway -- HFT is based on executing a suboptimal strategy too quickly for anyone with a theoretically better strategy to compete), and it is not a useful form of arbitrage. HFT turns futures markets into negative sum games for investors who are looking to hedge risks and even for speculators, siphoning money away from people who are using futures contracts in productive ways and filling the pockets of people who are doing nothing productive.
HFT firms are parasites, nothing more. The sooner we get rid of them, the better.
Re:Not surprising (Score:2, Insightful)
So to sum up, why do people take advantage if they can? Because there is an advantage to be gained.
And as for that sarcastic diatribe about 'innocent' bankers... dude, I didn't say they were innocent. In fact, I explicitly stated that they were not blameless. The issue is not binary, there is no absolute wrong and absolute right. You need to get your head out of your ass and realise that reality is not that simple.
Re:looks like a.. (Score:4, Insightful)
That's not why it's a waste of cash. It's a waste of cash because it's not going to be doing anything productive. It's simply going to allow some robot to make a trade six tenths of a millisecond faster. Whoopdy-doo. It's not going to help anyone, it's not going to make progress for anything, it's not going to do anything useful other than help make some already rich guys a fraction richer.
Delays destabilize the system (Score:4, Insightful)
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.