The Countdown to the Nanosecond
Does one millionth of a second—a microsecond— really matter? How about one billionth of a second? As exchanges and trading firms strive for ultra-low latency, a nanosecond most certainly can.
...
Nasdaq selected Correlix in November to provide Nasdaq OMX customers with independent real-time measurement of latency in trades on its market, for intraday and post-day analysis. “I think that’s the common goal, maybe someone would manage to break the 100-microsecond mark. Maybe we’ll have the first exchange going below 100, next year, maybe, it can get to tens of microseconds, but I think nanoseconds are a five-year horizon.”
Correlix measures up to one microsecond of granularity, which is pretty much what will be needed for the next two years, at least, said Melamed.
Competitor Corvil also supports nanosecond precision in its products, noted Byrne, who said many of his customers use this precision to examine nanosecond differences in arrival of messages. This is particularly important today in co-location facilities, he added.
“The final frontier is collocation, where the algorithms, the trading engines are right at the exchange, located as close as possible to where the orders are being executed so there’s almost no latency,” said Lloyd Altman, a senior executive in Accenture’s Capital Markets Industry division. “Whether that will be nanoseconds eventually, I would guess maybe one day it will be, but will it matter? What is the competitive advantage of being within nanoseconds? Ultimately, it really comes down to who got the order in first, who got the execution matched first, and the ultimate factor will be the speed of the execution engine within the exchange… you reach a point where it’s hard to see whether you are getting more efficient because it’s already so fast and so close.”
...
Once nanoseconds become the new benchmark, the race towards picoseconds—one-trillionth of a second— may not be light years away.
Posts
No comments:
Post a Comment