High Frequency Trading In Action: The Secret Behind a 825-Mile Internet Cable【Investor Story】

Описание: The high frequency trading game is won in the margins. Traders exploit arbitrage opportunities in price and make money without taking risks. Too good to be true?

Unfortunately for most people, the ticket to play the game is expensive. Traders with the fastest internet connection get all the eggs in the basket and so if you are 1 millisecond late, you get nothing. In 2010, Daniel Spivey, a trader, built a straight internet cable from the New York Stock Exchange and Chicago, connecting America's top 2 financial centers in lightning speed. The project took 2 years and $300M to build and is only 3 milliseconds faster than the previous record. That is $100M per millisecond of internet speed.

All the high-frequency trading houses, quant funds and New York banks such as Goldman Sachs, Morgan Stanley and UBS jumped on it at once, contributing to $2.8B worth of leases to use the cable. It's truly amazing how much 3 milliseconds are worth in the world of high speed trading.


About The Channel
Markets and poker are my favorite things in life. The two shares amazingly similar traits and I approach them in similar fashions.

I often find raw information around me verbose and unnecessarily complex. With that in mind, I try to dissect complexity into simple, digestible pieces to spur independent thoughts and aspire ideas.

In this channels, we will talk about stocks and value, share investor stories, technology trends, anything that gives us clarity in the future unknown.


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