Fri, 17 Feb 2012 02:55:52 GMT - High Frequency Trading Review
Can quantitative trading possibly get any faster? During the last decade, computers and fiber-optic networks have dramatically reduced the time it takes to execute an order in the financial markets. Ten years ago that lag was measured in seconds. During the last few years it was reduced to milliseconds and then, in some circumstances, to microseconds.
For a certain breed of high frequency traders, that delay, or latency, means everything. Low latency traders rely on direct, ultra-high-speed market connections to profit from fleeting price discrepancies in the price of a stock or other asset as it trades in different markets. To make that arbitrage work, low latency traders have relied on cutting edge algorithms developed by computer scientists — and super-high-speed fiber networks.
