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Networking The Almighty Buck Communications Technology

How Microwave Transmission Is Linking Financial Centers At Near-Light Speed 236

Posted by timothy
from the faster-than-you-can-read dept.
The L.A. Times has a short but compelling article about the state of the art (and coming state of the art) in dedicated networking technology in one of the applications where you'd expect the customers to care most about it: connecting financial trading centers. Milliseconds count, and the traders count milliseconds. From the article, one example: "[New York-based networking company] Strike, whose ranks include academics as well as former U.S. and Israeli military engineers, hoisted a 6-foot white dish on a tower rising 280 feet above the Nasdaq Stock Market's data center in Carteret, N.J., just outside New York City. Through a series of microwave towers, the dish beams market data 734 miles to the Chicago Mercantile Exchange's computer warehouse in Aurora, Ill., in 4.13 milliseconds, or about 95% of the theoretical speed of light, according to the company. Fiber-optic cables, which are made up of long strands of glass, carry data at roughly 65% of light speed."
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How Microwave Transmission Is Linking Financial Centers At Near-Light Speed

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  • But (Score:4, Informative)

    by rossdee (243626) on Saturday November 30, 2013 @10:36PM (#45565365)

    There was a story a few weeks ago about someone in Chicago that had a faster than light connection (when the Fed issued a statement about interest rates)

    • http://www.nanex.net/flashcrash/ongoingresearch.html [nanex.net]
      http://www.bloomberg.com/news/2013-11-26/speed-traders-meet-nightmare-on-elm-street-with-nanex.html [bloomberg.com]

      Nanex is the one creating this data. They're a small boutique market data firm out of the Northern Chicago suburbs. Their data showed that someone was leaking the Fed data a few seconds early.

    • Re:But (Score:5, Interesting)

      by Z00L00K (682162) on Sunday December 01, 2013 @01:31AM (#45566171) Homepage

      To avoid this the trade system should delay all transaction with a random factor between 10 and 20 minutes. That should make microtrading completely useless.

      • Re: (Score:3, Interesting)

        by pepty (1976012)
        Just accumulate all of the orders for one second. At the end of each second match the closest buy/sell orders to each other and execute the trades. Repeat.
    • by slick7 (1703596)

      There was a story a few weeks ago about someone in Chicago that had a faster than light connection (when the Fed issued a statement about interest rates)

      Stealing your money at the speed of fright.

  • by belg4mit (152620)

    Light speed in glass is less than that in air, which is less than that in vacuum. But the light (infrared, microwave, your favorite color) is still travelling at light speed.

    • Yes, because it's bouncing off of particles and such, however they are measuring the speed at which the signal meets the other end in a point-to-point scenario.

      Which begs the question, how much faster would fiber optics be without air in the line? I imagine it would be negligible, but it would be nice to know.
      • Re: (Score:2, Informative)

        by Mr Z (6791)

        Raises the question, maybe, but it certainly does not beg the question. [quickanddirtytips.com]

        In any case, the speed of light in fiber optics is dominated by the glass or plastic, not any air that might be somehow still be in the fiber. So far as I know, that quantity is zero or close enough at least. For fiber optics to work, you need total internal reflection [wikipedia.org]. To get total internal reflection over a decent range of angles (so that you can actually bend your fiber optic cable), you needs a sufficiently high index of refracti

        • by ultranova (717540)

          Raises the question, maybe, but it certainly does not beg the question.

          English is not context-free. Begging the question, for example, is an expression with multiple meanings, the correct one of which must be deduced from said context. You and "grammar girl" are, of course, free to disagree, just as Gene Ray is free to disagree with standard cosmology(?); just don't expect anyone else to care.

          For fiber optics to work, you need total internal reflection. To get total internal reflection over a decent range

      • by davester666 (731373) on Saturday November 30, 2013 @11:39PM (#45565731) Journal

        the next guy up will put up a series of dead-straight tubes, that they can create a vacuum in, then pass the microwaves through the tubes, just to get 97% of the speed of light.

        and of course, he will also be able to claim a patent on transmitting the internet through a series of tubes.

        • by mjwalshe (1680392)
          BT tried wave guides as an alternate to fibeoptics near the main BT labs in ippswitch there are still roads with test wave guides running along side them.
      • by mjwalshe (1680392)
        Not much :-) its glass or plastic that makes up fiber optics
    • by Pseudonym Authority (1591027) on Saturday November 30, 2013 @10:58PM (#45565489)
      Nope, nope, nope. The speed of light is c, the speed of light in various materials is denoted as factors of c (0.65c or 0.99999c).
    • by storkus (179708) on Sunday December 01, 2013 @12:01AM (#45565861)

      For some place that's supposed to be for nerds who, unlike me, finished college, this discussion is embarrassing. Parent post and 1 or 2 other posts have it right, and this is something that every radio guy knows as well.

      Wikipedia references: http://en.wikipedia.org/wiki/Velocity_factor [wikipedia.org]
      More general discussion with heavy math: http://en.wikipedia.org/wiki/Group_velocity [wikipedia.org]
      The reason for it all: http://en.wikipedia.org/wiki/Refractive_index [wikipedia.org]
      This is straight from the horse's mouth: http://www.corning.com/WorkArea/downloadasset.aspx?id=39403 [corning.com]

      • by Nemyst (1383049)
        Light speed, without any qualification after it, is generally accepted to mean c, celeritas. Adding "in a vacuum" is a pointless waste of space and only serves to confuse people who do not know, nor care, about the difference.

        It's amusing though how there's always at least one pedant "correcting" the article or summary in each and every article with that short-form term in it.
        • by nbauman (624611)

          It's amusing though how there's always at least one pedant "correcting" the article or summary in each and every article with that short-form term in it.

          I literally want to kill those people.

  • by Anonymous Coward

    Every day Slashdot should have one story that features a technological advance which could improve the daily lives of ordinary citizens.

    This isn't the one.

    • by locopuyo (1433631)
      Less delay in communication devices improves the lives of ordinary citizens.
      • Re: (Score:3, Insightful)

        by Anonymous Coward

        Only if not used to take advantage over said ordinary citizens.

      • by mrbluze (1034940)

        Less delay in communication devices improves the lives of ordinary citizens.

        For example, the gun was an improvement on the bow and arrow, both of which communicate the same message. There are certain uses of this technology that would dramatically improve the lives of ordinary citizens.

  • by Thagg (9904) <thadbeier@gmail.com> on Saturday November 30, 2013 @10:42PM (#45565397) Journal

    Sending a neutrino beam through the earth will be faster than taking the great-circle route across the surface of the earth.

    Of course, one would have to send a ridiculously large number of neutrinos to be sure to have them detected, but that's just an engineering problem.

    • by mattie_p (2512046)
      I wish I had mod points right now, I could not bump this fast enough.

      Eventually it will happen, due to the increasing financial costs of not having essentially real time communications between huge centers of finance.
    • Well there is a plan to build a neutrino factory that would create directional highly intense neutrino beams. While the goal is neutrino physics, it could be used as a transmitter. Its only ~$1B, maybe worth it to the financial guys. If they pay, they can have have 50% of the beam time.....

    • Somebody's been reading xkcd's What If series...specifically this one [xkcd.com] from within the last week.

  • Dodgy Customers (Score:5, Insightful)

    by mrbluze (1034940) on Saturday November 30, 2013 @10:43PM (#45565409) Journal

    here you'd expect the customers to care most about it:

    Yeah, and what customers? Electronic trading supercomputers.

    None of this makes a difference to honest trading except to ensure its loss making properties.

    • Re: (Score:3, Insightful)

      by Anonymous Coward

      Traders with ultra fast computers place orders at a fixed price. If no one nibbles immediately and they can't make a profit in a few milliseconds, the order is cancelled. The current system makes "traders" very rich because they "cheat" legally.

    • Re: (Score:3, Informative)

      None of this makes a difference to honest trading except to ensure its loss making properties.

      I think I see a flaw in your cunning argument: First, all trades are honest as long as it is not made under duress. And any macroeconomic teacher will tell you that in a trade both people get something they want, so the more trade you have, the better the economy is. People are operating under a wide variety of misconceptions regarding high speed trading, and only a few of the criticisms are valid. High speed trades mean that the value of a given stock or financial offering is much closer to the line where

      • Re: (Score:2, Insightful)

        by Anonymous Coward

        Shilling hard for Goldman Sachs are we?

        People get confused between high frequency trading and algorithmic trading.

        A distinction without a difference. High frequency trading requires algorithmic trading otherwise it can't match the fluctuations in price.

        I see none for high speed trading

        Valueless arbitrage. Buyer and seller would have met if not for the middleman leeching off both.

        There is no coercion or manipulation in the trade itself.

        What about when the traders fuck up, why is it they can ask NASDAQ et. a

    • by khallow (566160)

      makes a difference to honest trading

      But is this trading Truly Scottish? That's the real dilemma here!

      I agree with the other replier. If the trading is legal, then it is honest.

      • It's honestly taking advantage of market inefficiencies to profit without contributing any value. It was legal for Magnetar to sell RMBS that they had long CDS positions on, without telling the buyer that.

        • by khallow (566160)

          It's honestly taking advantage of market inefficiencies to profit without contributing any value.

          That describes most economic activities. If I shop at the local grocery, the local grocery is taking advantage of the market inefficiency of food not automatically being in my refrigerator.

          It was legal for Magnetar to sell RMBS that they had long CDS positions on, without telling the buyer that.

          Ok, so what? If Magnetar was in the least responsible for those RMBS after the sell, then the CDS would have covered any costs they incurred. It'd also help cover the costs of the RMBS market drying up, should a bunch of RMBS securities fail.

          • Not quite the same. The supermarket is performing a valuable service of providing a central location where I can purchase most of my food. It provides some level of quality control and acts as a single legal entity that I can deal with if there is a dispute. The supermarket also manages some of the transportation of the food from the locations where it is produced.

            Financial trading can be valuable if it re-directs investment money to enterprises with higher productivity. High speed trading does not seem to

            • by khallow (566160)

              High speed trading does not seem to me to do this in any way, it is simply a zero-sum game where real resources (in high speed computers and data links) are used in a way that does not increase overall productivity. It is not unique in this, bitcoin mining is also inefficient in that it consumes real resources to produce an artificially scarce good to use as a medium of exchange.

              Just because you don't perceive a net value from these activities, doesn't mean that they don't exist. The fundamental indication that value is created is that trade happens.

              It would be more efficient (but would lose other advantages) if there were a central repository of free to generate but limited number "coins" that were directly exchanged for money.

              Why would that be more efficient? How is the central repository going to get anyone to use their coins? How do we keep the central repository from creating more coins whenever it deems it convenient?

  • by superdude72 (322167) on Saturday November 30, 2013 @10:50PM (#45565449)

    The fact that the traders count milliseconds is proof that they are just scam artists. Parasites, producing nothing of value. High-speed trading is nothing but a mechanism for funneling money to the rich from everyone else.

    • by femtobyte (710429) on Saturday November 30, 2013 @11:02PM (#45565511)

      but... but.. liquidity! Businesses need to be able to make decisions to respond to market needs on 4.13 millisecond timescales! Imagine how much economic damage there would be if the Job Creators had to wait a whole 6 milliseconds (at fiber-optic speeds) for their decisions to take effect!

    • by khallow (566160)

      Parasites, producing nothing of value.

      Liquidity and all the other usual counter-reasons you hear, but fail to recognize.

      High-speed trading is nothing but a mechanism for funneling money to the rich from everyone else.

      Yea, right. Don't do market orders or stop loss orders. Just do limit orders. Now, you're immune to high frequency trading, because you aren't doing high frequency trading yourself.

      • Why should liquidity be kept artficially scarce?

        • by khallow (566160)

          Why should liquidity be kept artficially scarce?

          Any means for the market to extract revenue from trade will result in trade inefficiencies. So stock markets are indirectly keeping liquidity artificially scarce in order to increase revenue from providing faster market access.

    • The fact that the traders count milliseconds is proof that they are just scam artists. Parasites, producing nothing of value. High-speed trading is nothing but a mechanism for funneling money to the rich from everyone else.

      It adds a whole new meaning to, "pulling a fast-one"!

    • by fatphil (181876)
      No disagreement. I used to view them as harvesting noise. I now view them like Maxwell's Demon, mostly because this high speed trading permits them to open the valve more precisely.
  • by runeghost (2509522) on Saturday November 30, 2013 @10:57PM (#45565483)
    Step 1: Intercept the transmisson Step 2: ??? Step 3: Profit!
    • Step 1: Determine when a competing trader is in the most vulnerable position
      Step 2: Seed clouds to start a weather pattern that reduces bandwidth of the microwave relay
      Step 3: ???
      Step 4: Profit!

      • Step 1: Rent an apartment across the street from the stock exchange
        Step 2: Cook delicious hot pockets in the microwave while the interference messes with the traders' signals
        Step 3: ???
        Step 4: Eat delicious hot pockets
  • by rusty0101 (565565) on Saturday November 30, 2013 @11:10PM (#45565557) Homepage Journal

    Considering the Nova episode 'making things faster' with David Pouge as the host presented this over a month ago, and they have production lead time delayse amounting to months, I'm with the people suggesting that this is a repeat. And hardly qualifies as 'news'.

    That said, cool.

    Also noted in the Nova episode was that the physical path that the fiber-optic route takes is going to be longer than the path that the microwave route takes.

    If they are not doing it already, I would suspect that the next step will be to move the repeater electronics up to the microwave dishes at the intermediary locations. My experience with telcom is that this is usually housed in the shelter at the base of the towers, however if they can locate it with the dishes it will eliminate a path distance of at least twice the sum of the elevations of the dishes, divided by the velocity factor of the media they use to connect those, (roughly 1 for dry waveguide, and usually between .6 and .9 for different varieties of co-ax media.) It's not a lot, but if they are looking to eliminate every possible delay, that's got to be in their plans.

  • by Anonymous Coward on Saturday November 30, 2013 @11:42PM (#45565761)

    The high speed trading field is bein geviscerated by the placement of FPGA based devices on fiber leaving the building. There's no point ot a "high speed link", with all the insanity involved in that technology, when you can program a sophisticated monitor and sales control tool right outside the stock exchange.

    Now, the center that analyzes the history of such data and builds your models of how to respond can be in another state and pre-program the FPGA. But these devices are already being used: It took me twenty minutes to stop laughing at a job interview with one such company: I was unsure just which of my talents they wee interested in until I noticed a display of such devices, and realized they wanted me to assist in their migration to a much, much cheaper part of the country for all their modeling and analysis tools, and just leave a box or two of Nallatech FPGA cards at the New York Stock Exchange.

    It was amazing how fast they put the NDA in front of me when I explained the implications to their core business model, and started tying it to the repercussions of moving *away* from the human contacts that provide back channel, essentially insider knowledge, when the analysis boxes are no longer in the data center with your own staff on site. My speculative "if you need to tune these models manually, you need to secure the information, and who is allowed to change that model? how do you manage the provenance of such orders" discussion apparently set off alarm bells that urged them to get me under an NDA, whether or not they ever made an offer. Life got really adventuresome when I refused to sign an NDA without an offer on the table.

    • There's no point ot a "high speed link", with all the insanity involved in [FPGAs]

      Do that for a day, and then come back and tell us how you fared. Local silicon in New York doesn't do squat when the best information is coming from Chicago, London, or Tokyo.

  • by dbIII (701233) on Sunday December 01, 2013 @12:37AM (#45565973)
    It looks like another symptom of why China is going to kick our ass. All this effort put into getting crumbs from what other people do instead of doing something tangible.
    • What does China do again? Provide cheap labor? 3D printing will eliminate that advantage.

      • by pepty (1976012)

        What does China do again? Provide cheap labor? 3D printing will eliminate that advantage.

        China Provides cheap labor, lax environmental and zoning restrictions, entire cities organized around particular industries ... 3D printing is a very expensive and very slow way to manufacture pieces of plastic or metal in small quantities. If it was a fast and inexpensive way to make things by the gross they would make things that way in China. Instead they make 3D printers (stepper motors, motor drivers, microcontrollers, wires and connectors, etc) and sell them to us.

      • by thegarbz (1787294)

        What does China do again? Provide cheap labor? 3D printing will eliminate that advantage.

        Yes.

        Oh and they also educate themselves at a faster rate than the US, and they fill top positions with engineers rather than MBAs and Lawyers, lately they've been a cheap engineering workhorse doing their best to displace western products from the shelves (you don't think those cheap local companies actually do any engineering do you?) You know the best part? We're the ones training them. The number of overseas Chinese students who return home post studies is simply mind boggling. They don't take their EE d

      • 3-d printing is more expensive than conventional production methods for large volume production. Its not clear yet at what volume it will be competitive, but I expect that it will mostly be used for small / semi-custom production. (which is quite useful).

        China does lots of things besides providing cheap labor. The have infrastructure (roads, rail, electricity, etc), and laws that make it efficient to do large scale production, though arguably at the expense of quality of life for the workers. (I say arguab

  • So now that the latency of light through glass is undeniably a costly limitation, what's next for fiber optics?

    You'll still need the total-internal reflection whatever the material, but perhaps something with a refraction index closer to c? Water-filled tubes? Hollow tubes filled with a gas?

    NY to Chicago is a pretty short run. While everyone is ranting about the economic/political aspects of this move, we'd all benefit if intercontinental telecommunications links had 50% lower latency.

    • by femtobyte (710429)

      we'd all benefit if intercontinental telecommunications links had 50% lower latency.

      How so? I can't recall any personal harm from overseas communications latency taking a few extra milliseconds; I still seem to be able to get all the data I need from over yonder. Besides oligarchical leeches manipulating markets abstracted from any practical or beneficial use, how do the rest of "we all" benefit from latency reductions beyond reasonable-for-human-time-scale-interaction latencies?

    • by putaro (235078)

      Line of sight communications means you need relays somewhere to go around the curve of the earth. We already cut huge latencies off intercontinental links by going from satellite links to fiber optics.

      • Line of sight communications means you need relays somewhere to go around the curve of the earth. We already cut huge latencies off intercontinental links by going from satellite links to fiber optics.

        Or... start drilling!

  • Hmmm...Time to take a weather balloon and a big sheet of aluminized mylar on a frame and let them out right in the line of sight and do something that makes money when their communications slow down.

    • by pepty (1976012)

      Hmmm...Time to take a weather balloon and a big sheet of aluminized mylar on a frame and let them out right in the line of sight and do something that makes money when their communications slow down.

      Like charging $10k per minute to not drop microwave chaff in their line of sight? I like it.

      • by putaro (235078)

        I was originally thinking something complicated with the stock market but straight extortion is just so much simpler!

  • Ever see two ships using those flashing lamp things to talk in morse code? They are communicating at the speed of light.

    Data transfer speed is in baud, or bps, or Gb/s, or Encyclopedia Britannicas/s - never metres per second.

  • If the trading computers were located in satellites in low earth orbit, they could arrange to always have one withing a few hundred miles and line-of-sight to each of the big exchanges.......

    Finally a way to fund the space program.

  • Boring..

    Tell me when they loop up enough fiber optic to use quantum entanglement for instantaneous transmission.

  • Why don't they use quantum entanglement to transmit information in real-time? The bandwidth needed is minimal, for a real-time ticker you really only need a few details, such as price and volume. If you figure 256 bits (32 bytes) per transmit, you could track anything you want in real-time down to the millisecond for 32 KB/s. I'd imagine this is achievable using quantum entanglement?

    • Not yet, but I can guarantee someone out there is working on it.
    • by nbritton (823086)

      Why don't they use quantum entanglement to transmit information in real-time? The bandwidth needed is minimal, for a real-time ticker you really only need a few details, such as price and volume. If you figure 256 bits (32 bytes) per transmit, you could track anything you want in real-time down to the millisecond for 32 KB/s. I'd imagine this is achievable using quantum entanglement?

      You can do it with 128 bits if you only track stock symbol and price, sampling at 50 times a second, a 32 KB/s QE link could track 40 stocks in real-time. I envision some type of asynchronous system, with the return being send via traditional communications technologies.

      • sampling at 50 times a second

        Using quantum entanglement to achieve zero transmission delay, and then only looking at it once every 20 milliseconds? You may as well just use fiber, as half of the time you will still receive information ahead of a polling-based QE system. Now, the benefit for the QE system increases as the fiber distance increases, so your idea still makes sense for mutli-planetary HFT. Just... not between Chicago and New York.

    • Why don't they use quantum entanglement to transmit information in real-time? The bandwidth needed is minimal, for a real-time ticker you really only need a few details, such as price and volume. If you figure 256 bits (32 bytes) per transmit, you could track anything you want in real-time down to the millisecond for 32 KB/s. I'd imagine this is achievable using quantum entanglement?

      No.

      Quantum entanglement doesn't work that way: Information transmission via the channel you
      imagine is impossible (at least as far as we understand physics today). Yes, measuring the
      state of an entangled quantum object instantly determines the state of its remote counterpart.
      No, you can't use that to transmit information faster than light.

      Because:
      The measurement you end up with is random. There is no way to force the state to be one
      of the two possibilities, and therefore you have no influence over

  • But didn't we see that if they are using systems like this that a thief could steal the money by intercepting the transmission [imdb.com]?

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