By Matthew Philips
In high-frequency trading, speed means everything. With most firms using sophisticated trading algorithms to scour the stock market for tiny price differentials, the trick isn’t so much spotting the profit opportunity, but getting there first. Which is why HFT firms put so much effort (and money) to upgrading their computers while paying steep fees to locate their servers next to those of the exchanges. There’s even a rush to spend millions improving the world’s fiber-optic cables so HFTs can shave a few milliseconds off execution times—reducing “latency,” in industry parlance.
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