#Latency race to the zero

In recent years, various constituents in the financial services industry have played their part in reducing latency, to a point now where we’re seeing diminishing returns. Nevertheless, latency is still the prominent buzz word in the highly competitive world of modern electronic trading, as it is not about the absolute speed but being faster than your competition.

In response to such an intensified latency race, CBOE recently announced their plan to migrate the primary matching engine to New Jersey, where all other major exchanges and trading firms site their engines. On the other end, companies are still working on cutting down the time for signals to travel between New York City and Chicago: network specialist Ciena has made round-trip travel time to as little as 14.5 milliseconds. There are still plenty of trading strategies that can take advantage of such a low-latency connection.

However, physical cables seem not fast enough for some latency-enthusiastic, even with optical technology; the most latency-sensitive high frequency traders are now using microwave transmission systems to get ever faster, despite its prohibitively expensive cost.

So is the latency race all that matters for high frequency traders? Experts from the most successful trading firms and exchange leaders will come to the Trading Show Chicago to debate on this utmost technology challenge.