Microwave is traditionally used to reduce latency caused by fiber’s refractive index. I suppose you could bury waveguides, but an air interface works just as well (besides the occasional weather; better to be fast most of the time).
I can assure you, that link already exists several times over. There are dozens of links between Aurora and 350 E Cermak, and dozens more between 350 E Cermak and Cateret, NJ. There's even an entire ISP based off the lowest latency link between Chicago and New York.
Ah, cool. Is there a significant operation in West Chicago, too? From the article, I was still confused by why a shortwave tower would be located there. West Chicago is close to Aurora, I suppose, but if it's for CME data center, why not put the tower in Aurora?
Heh, that became very confusing. The post I replied to was edited at some point asking why there isn’t a direct microwave link down I-88 in Chicago. Sorry about that :)
Or a much thicker fiber with conductive coating while sending microwaves through it? Shorter microwaves should be transmissible via a few mm wide conductive pipe.
Yes, that would commonly be called circular wavegguide. The issue with using waveguide is that it is very expensive to run over distances. WR-75 flexible waveguide, for instance, costs roughly $1k/ft.
It's weird that we've set up a stock market for machines rather than humans, where ever-faster bots interpose themselves between slightly slower bots, all the way up to the original buyer and seller, who are probably bots as well.
The machines help humans. The bid/ask spread on a $100 share in 1970 as $5. Now it's $0.003 cents and it will continue to narrow, saving you and I money.
It would be much wider, because the dumber your pricing, the less certain you can be about how the price may move, so you have to be more cautious and quote wider.
This sounds like circular logic to me. It really saves money to people who want to buy and sell often, which has no social value. I think having a penalty for buying and selling too often is a feature, not a bug : we want investors that think long term.
>> I think having a penalty for buying and selling too often is a feature, not a bug : we want investors that think long term.
This already exists. It's the long-term capital gains tax reduction compared to short-term cap gains tax, and very high corporate taxes (relative to the rest of the world).
It benefits the majority of adults in the US and the vast majority of retirees who have exposure to stock vis retirement accounts. It has benefits to every pension fund, including teachers and public sector unions.
I could continue, but don’t poo poo things of which you don’t understand the components or utility.
This all sounds so perverse to me. There are so many obviously brilliant people working on these things. Why aren't they doing something productive with their time? Fighting climate change, educating uneducated, feeding the unfed. All the energy and rare and bloody minerals that are being put into these radios, all the drinking water that will be forever tainted after having been used to produce the semiconductors needed for all this... was it really the best place to use it? To make the roulette wheel run a little faster? I don't understand it.
You won't like it, but the there is a sensible answer for this. Despite you not liking the stock (and other financial) markets, they do perform a useful and needed task (price discovery, reallocation of resources, reallocation and focusing of human brainpower, reallocation of capital, allowing for investment (allocation of collected capital and resources in the present for future projects, so that they can be achieved faster, and thus provide overall better output of the system)), and even speculation is also an important part of that task.
It is not needless greed (as popularized by some movies and pop culture), it is an engine of the capitalist civilisation, which has so far produced far more results (even in less obvious terms like allowing for least poverty in the world than any other time in history, because the benefits of a well-functiouning society do evidently trickle down to the the little guy, even if the most of it is collected at the top) than any other.
There is indeed some meaningless speculation in it, just like how there is corruption in all of human systems, and just how in every ecosystem there are a number of parasites, but they are there because the underlying system (capitalism) is meaningful and produces value for society.
> feeding the unfed
They do feed the unfed. The capitalist system has been able to reduce world poverty by far far more than any other system in history. Look at the stats. And well-functioning capital, labor, idea and resource circulation markets are at the very heart of that system.
> And well-functioning capital, labor, idea and resource circulation markets are at the very heart of that system.
Sure. But I'd question whether high-frequency trading is a necessary component of that, as opposed to regular-frequency trading. Same as I'd question whether things like collateralized debt obligations and interest-free loans were good for the housing market.
"Capitalist civilization" has changed in a number of ways since Reagan and Thatcher, just in its legal framework, compared to the thirty years before and I don't think it's obvious at all that we are better off in the developed world than we were in the fifties and sixties when things were more regulated.
When I look at stats for things like wage disparities, and the amount of money poured into marketing (demand generation), and the amount of frivolous products that the capitalist economy produces because it must by its nature constantly expand production, I quite honestly don't see efficiency and I certainly don't see reason.
>When I look at stats for things like wage disparities, and the amount of money poured into marketing (demand generation), and the amount of frivolous products that the capitalist economy produces because it must by its nature constantly expand production, I quite honestly don't see efficiency and I certainly don't see reason.
Have you ever picked up an economics textbook and read it?
>> When I look at stats for things like wage disparities, and the amount of money poured into marketing (demand generation), and the amount of frivolous products that the capitalist economy produces because it must by its nature constantly expand production, I quite honestly don't see efficiency and I certainly don't see reason.
Have you considered its alternatives are not much better, if at all?
Your idealistic vision of the stock markets doesn't hold well to the reality of the Fed literally price fixing everything under the sun so that we don't experience the biggest crash since 1929.
Right now there is no price discovery, all stocks are way overpriced.
While mainstreet is going in flames, wallstreet acts like everything is peachy and jumps on any rumor of a hint of a possibility that someone somewhere might someday have something that look like the possibility of a COVID vaccine (looking at you Gilead scam).
People have been saying that for decades. How many decades of successful operation are worth then having a couple of years of "won't end well"? Also why do we think that any other system would "end well" (whatever that specifically means)? It's not like there were never any economic crises or instability before FED and other organizations started manipulating the system that way.
My company will probably default in September according to the boss.
I'm French and I'm convinced that in less than 2 years from now I won't pay with Euros anymore (maybe Francs or South Euros or whatever they will invent).
So at least for me it doesn't end well very soon. But even the FMI boss called for a big reset.
Only comment I have is the in the US the Federal government imposes enormous and continual cash transfers from wealthy states to poorer state. I've come around to the idea that without those the system would fall apart. And that the EU does not appear to have anything at that scale. Also in the US banking is 100% backstopped by the Fed.
> Why aren't they doing something productive with their time?
Why is it any of your business how other people spend their time? There's no objective standard for morality.
>To make the roulette wheel run a little faster? I don't understand it.
Maybe try learning a bit about how markets work and the service they provide. Your criticism makes as much sense as somebody with no familiarity with the software industry complaining about encryption researchers wasting their time enabling child abuse.
That's an interesting analogy, because I often find that the counterarguments sound a lot like techies arguing that encryption cannot have negative consequences.
> There are so many obviously brilliant people working on these things. Why aren't they doing something productive with their time?
You could say the same thing about pushing ads. The fact is that if there’s something that generates money, smart people will gravitate towards it if they can increase margins in a competitive field no matter how useless it might seem.
This is a sort of determinism built in to capitalist morality: If money can be extracted from something, then it is always good and just to do so. Natural, in fact.
(And to be extremely clear, I would say the same thing about pushing ads: just stop doing it. Walk away.)
Yes it is perverse indeed. Imagine all the engineering being put into ads, tracking and hft instead of, I dont know, engine emission control or educational programs for kids.
The incentives are all messed up.
Hft could probably be "fixed" by some game rules. Like delaying any request by 10s+-some random delay. Then having an edge of some ms would just be noise.
>Imagine all the engineering being put into ads, tracking and hft instead of, I dont know, engine emission control or educational programs for kids.
Not everybody cares about those things, in fact I'd wager the majority of people I know in HFT would be bored to tears at the thought of working on emission control or children's education programs. What gives you the right to decide how other people should spend their time?
This is a strange argument. You are arguing that HFT has a big effect on society (ie. the rest of us), but at the same time you are saying that society should not have a say in how or indeed if HFT is conducted?
I am not saying I would want to draft Goldman Sachs programmers into digging ditches.
I have worked with ECU development and there are low hanging fruit to optimize for there if the effort, brainpower and money was put into it.
I just wish that more effort was put into "low margin" classical industrial design than artificial top of the pyramids' algorithms, like banks and ads.
>I just wish that more effort was put into "low margin" classical industrial design than artificial top of the pyramids' algorithms, like banks and ads.
Much of the development of high-performance network switches has been driven by HFT. I doubt Metamako would have been created if HFT wasn't around as a customer.
Sure. I mean HFT is not destructive or evil or anything (not sarcasm btw). It is more about what fields are lucrative for programmers versus the benefit for socaity.
This is just whining of course I am not saving children at work either.
I feel like that is saying that "high-speed cameras would never have been developed if we hadn't needed them in surveillance planes to plan for bombing runs". Seems like a lack of creativity in coming up with alternate, "better" use-cases that would still create a demand for the same technology. High speed cameras are useful for, say, factory automation and crash-testing. High-performance network switches could be used in robotic tele-surgery and protein-folding supercomputers.
The bots don't take profit, the humans do. They just use bots because bots can help them better achive what they need, much like we may prefer to use a browser to fetch information from the internet rather than physically going down to a library.
It's pretty hard to hide a yagi-uda antenna capable of transoceanic distance communications. The data rates are MUCH lower than what's possible by fiber and microwave, as pointed out in the article.
I remain convinced that this is Starlink's short-term customer if their promises are true. They are doing transmission via optical as the crow flies. If they're doing O-O, or even low latency O-E-O, they can beat transatlantic fiber. For HFT houses, that's potentially a major edge.
Starlink latency would be worse than shortwave. The advantage would be bandwidth, but I doubt that high bandwidth is really helpful for this application, especially if you have to give up a tiny bit of latency for it. After all, you can already have all the bandwidth you want with only slightly higher latency.
If memory works well, they have dedicated glass fibre for bandwidth, at least between Chicago and NY. Took the closest possible distance.
Microwave is used for speed, in addition, to get binary signals from A to B. I heard that theory more than once about Starlink, it just doesn't make that much sense to me. Starlink could also be, of course, a clever way of getting
a) enough launches to make reusable rockets financially feasible
and/or
b) getting financing for SpaceX
Quite some other companies trying the same went under recently.
Sure, but it seems to me like the Starlink path will still be longer in almost all cases unless you're incredibly lucky and the satellites line up exactly along the path for a few seconds. And Starlink could have additional delays related to routing and possibly TDMA. What kind of latency issues need to be considered with shortwave?
The paper actually talks about trading:
> Already there are new private microwave relay links between
New York and Chicago[11], London and Frankfurt[1], and
London and Paris. These links have relatively low capacity
compared to fiber, but are of high enough value to the finance
industry to be worth building new low latency links
In their paper, they say NYC / LON RTT will be between 58 and 66 ms -- this isn't much better than fiber. On the other hand, London to Joburg -- starlink has an advantage.
It's also bandwidth right? What's the throughput on shortwave? I believe that Starlink promises mbps+. I imagine there are applications you can implement on higher bandwidth are more interesting?
What happens in the global market if a single person consistently has a timing advantage over every other participant(because the barrier to building a global satellite network is too high/costly for anyone else)? Could Elon come to own the entire market, or is there some limit to the powers of arbitrage?
If a single player was capturing the entire arbitrage market, they'd be earning enough to justify other players building their own satellite network to capture a piece of the pie.
Are you sure about that? They would on average perhaps be a slight bit faster, but if the randomized delays are an order of magnitude larger than the latency, they may not be able to do anything useful with that advantage.
If the delays are randomized then you have as good as chance of getting them as your competitors. On delayed times you will have a bad chance of winning, but in comparison to others with the same delays your latency beats theirs, on non-delayed times your latency beats non-delayed competitors and really beats delayed competitors.
Thus in the end the best latency should win biggest on non-delayed trades, and on delayed trades lose least.
Well, think through some toy examples. Suppose there is a market without order matching (again, toy example) and one market participant enters an extremely mispriced order, so the first person to fill that order wins. Even in the presence of random delays, the participant with the lowest-latency connection has a higher chance of filling the order than anyone else. (There are other anomalies, e.g. participants are now incentivized to have as large a number of distinct connections and hence "chances to roll low" on the randomized delay as possible).
This mechanism ("batch auctions") are not immune to rewarding low-latency connections. The details depend on the exact auction mechanism but the general idea is that you want to join the batch as late as possible (at any moment in time when you make a decision to join the batch, you are never worse off if you wait a while before joining) and low-latency connections can afford to join later.
In fact with your exact proposal, assuming everyone has a connection with at most (say) 50ms latency, no one will join the batch in the first 50ms, which (I think) magnifies the low-latency advantage.
If you make a decision to join in the (say) the 5th ms of the batch auction and you have a latency of 1ms, you are still no worse off if you decide to wait 4ms before joining the batch.
You can solve for this with a commit and reveal scheme, where trades with hidden price and size are committed in the first period and revealed and settled in the second period.
The advantage of speed or waiting until the end is mitigated as you can receive no additional information either way.
I can only assume that either you are being sarcastic, or you haven't got a pension - because if you have I can tell you, your pension is being used to pay the winnings.
"This 350 microsecond delay adds a round-trip delay of 0.0007 seconds and is designed to negate the certain speed advantages utilized by some high-frequency trader"
To negate market advantage created by investment and monopoly practices; HFT is front running, front running damages the economy, but more importantly it damages me because I can't do it and therefore it is just being done to me.
84 comments
[ 3.1 ms ] story [ 65.7 ms ] threadhttps://sniperinmahwah.wordpress.com/2018/05/07/shortwave-tr...
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https://en.wikipedia.org/wiki/Spread_Networks
Amusingly, I grew up 2 towns over from Aurora and live 3 towns from Carteret now.
Who made you the global arbiter of social value? Clearly the people participating in the transaction see some value in it.
This already exists. It's the long-term capital gains tax reduction compared to short-term cap gains tax, and very high corporate taxes (relative to the rest of the world).
I could continue, but don’t poo poo things of which you don’t understand the components or utility.
It is not needless greed (as popularized by some movies and pop culture), it is an engine of the capitalist civilisation, which has so far produced far more results (even in less obvious terms like allowing for least poverty in the world than any other time in history, because the benefits of a well-functiouning society do evidently trickle down to the the little guy, even if the most of it is collected at the top) than any other.
There is indeed some meaningless speculation in it, just like how there is corruption in all of human systems, and just how in every ecosystem there are a number of parasites, but they are there because the underlying system (capitalism) is meaningful and produces value for society.
> feeding the unfed
They do feed the unfed. The capitalist system has been able to reduce world poverty by far far more than any other system in history. Look at the stats. And well-functioning capital, labor, idea and resource circulation markets are at the very heart of that system.
Sure. But I'd question whether high-frequency trading is a necessary component of that, as opposed to regular-frequency trading. Same as I'd question whether things like collateralized debt obligations and interest-free loans were good for the housing market.
"Capitalist civilization" has changed in a number of ways since Reagan and Thatcher, just in its legal framework, compared to the thirty years before and I don't think it's obvious at all that we are better off in the developed world than we were in the fifties and sixties when things were more regulated.
When I look at stats for things like wage disparities, and the amount of money poured into marketing (demand generation), and the amount of frivolous products that the capitalist economy produces because it must by its nature constantly expand production, I quite honestly don't see efficiency and I certainly don't see reason.
Have you ever picked up an economics textbook and read it?
Have you considered its alternatives are not much better, if at all?
Right now there is no price discovery, all stocks are way overpriced.
While mainstreet is going in flames, wallstreet acts like everything is peachy and jumps on any rumor of a hint of a possibility that someone somewhere might someday have something that look like the possibility of a COVID vaccine (looking at you Gilead scam).
This won't end well (imo).
People have been saying that for decades. How many decades of successful operation are worth then having a couple of years of "won't end well"? Also why do we think that any other system would "end well" (whatever that specifically means)? It's not like there were never any economic crises or instability before FED and other organizations started manipulating the system that way.
I'm French and I'm convinced that in less than 2 years from now I won't pay with Euros anymore (maybe Francs or South Euros or whatever they will invent).
So at least for me it doesn't end well very soon. But even the FMI boss called for a big reset.
Unfortunately, most people don't reflect too deeply on the social consequences of their choice of employment.
Why is it any of your business how other people spend their time? There's no objective standard for morality.
>To make the roulette wheel run a little faster? I don't understand it.
Maybe try learning a bit about how markets work and the service they provide. Your criticism makes as much sense as somebody with no familiarity with the software industry complaining about encryption researchers wasting their time enabling child abuse.
You could say the same thing about pushing ads. The fact is that if there’s something that generates money, smart people will gravitate towards it if they can increase margins in a competitive field no matter how useless it might seem.
(And to be extremely clear, I would say the same thing about pushing ads: just stop doing it. Walk away.)
The incentives are all messed up.
Hft could probably be "fixed" by some game rules. Like delaying any request by 10s+-some random delay. Then having an edge of some ms would just be noise.
Not everybody cares about those things, in fact I'd wager the majority of people I know in HFT would be bored to tears at the thought of working on emission control or children's education programs. What gives you the right to decide how other people should spend their time?
Where am I arguing this?
I have worked with ECU development and there are low hanging fruit to optimize for there if the effort, brainpower and money was put into it.
I just wish that more effort was put into "low margin" classical industrial design than artificial top of the pyramids' algorithms, like banks and ads.
Much of the development of high-performance network switches has been driven by HFT. I doubt Metamako would have been created if HFT wasn't around as a customer.
This is just whining of course I am not saving children at work either.
Microwave is used for speed, in addition, to get binary signals from A to B. I heard that theory more than once about Starlink, it just doesn't make that much sense to me. Starlink could also be, of course, a clever way of getting
a) enough launches to make reusable rockets financially feasible
and/or
b) getting financing for SpaceX
Quite some other companies trying the same went under recently.
...disclosure: i'm the first one to build NY-Chi microwave, and Chi-Lon shortwave.
difference is not that big
basic math, "satellite density" or "average distance between satellites" if they were just at random position is ~200km (napkin math, might be off).
The paper actually talks about trading: > Already there are new private microwave relay links between New York and Chicago[11], London and Frankfurt[1], and London and Paris. These links have relatively low capacity compared to fiber, but are of high enough value to the finance industry to be worth building new low latency links
In their paper, they say NYC / LON RTT will be between 58 and 66 ms -- this isn't much better than fiber. On the other hand, London to Joburg -- starlink has an advantage.
Was Pilosoft always an HFT thing?
bandwidth is a few bits per message, a few messages per second.
yes you can do more with more bits and more messages, but you can do quite a lot with 2 bits!
but shortwave will be competitive with spacex, although at, of course, lower capacities.
for inter-market trading, sub-ms latency differences don't matter that much.
And another market for which bits to jam and prevent either value from getting through.
If the delays are randomized then you have as good as chance of getting them as your competitors. On delayed times you will have a bad chance of winning, but in comparison to others with the same delays your latency beats theirs, on non-delayed times your latency beats non-delayed competitors and really beats delayed competitors.
Thus in the end the best latency should win biggest on non-delayed trades, and on delayed trades lose least.
In fact with your exact proposal, assuming everyone has a connection with at most (say) 50ms latency, no one will join the batch in the first 50ms, which (I think) magnifies the low-latency advantage.
The advantage of speed or waiting until the end is mitigated as you can receive no additional information either way.
"This 350 microsecond delay adds a round-trip delay of 0.0007 seconds and is designed to negate the certain speed advantages utilized by some high-frequency trader"
I watched this short video about it too - https://www.youtube.com/watch?v=d8BcCLLX4N4