High-frequency traders are continually scrambling to improve the speeds of their already lightning-fast trades and maintain competitive advantage. In a world where every millisecond costs money, we are seeing some truly weird and wonderful technological innovations. Good old fibre-optic cables still dominate, and will likely do so for some time, but firms are increasingly looking to wireless solutions to gain an edge where possible.
Signals sent via microwave will reach their destination some 35 to 50 per cent faster than signals sent over a cable. Line-of-sight microwave transmissions already carry thousands of trades to and fro between Basildon and Frankfurt, and New York and Chicago, every day. But line-of-sight transmission becomes a bit trickier when hurling a signal across the Atlantic Ocean. In order to speed up trading across that vital London–New York trade route, the microwave signal will need a reliable relay system. Here the industry is exploring solutions more reminiscent of science fiction than high finance, from low earth-orbiting satellites to unmanned solar-powered drones – and even hot air balloons. It would be rather ironic to see trading speeds step up a gear thanks in part to one of the slowest forms of transportation ever devised by man.
But why stop at microwaves? We know that the universe has a speed limit – the speed of light. Microwaves also travel at this speed of course, but visible light has a higher frequency and so allows for a greater rate of data transfer – so why not use this? Chicago communications company Anova is doing just this, with plans to activate an array of lasers in March that will link the data centres of the NYSE and NASDAQ in New Jersey.
We love finance here at Aspectus but, let’s face it, finance can be dull. Many people (and even those within the industry) find it difficult to relate to the abstract monster the modern financial services industry has become: a vast structure of balance sheets, bets, and numbers. High-frequency trading suffers from this perception more than most, as it is also hidden behind a layer of computing wizardry few really understand.
However, throw in some satellites, lasers, and solar-powered drones and one can instantly capture and fire the imagination. It is, of course, important for financial services firms to talk the bread and butter of their trade. But thinking laterally and finding that human interest angle that elevates the story beyond your niche is a vital part of getting people to not just talk about you, but pay attention.