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    The £300m cable that will save traders milliseconds



    Seabed survey work for the Hibernian Express, as the 6,021km (3,741 mile) fibre-optic link will be known, is already under way off the east coast of America.

    The last cables laid under the Atlantic were funded by the dotcom boom in the 1990s when telecoms infrastructure firms rushed to criss-cross the ocean.

    The laying of the new transatlantic communications cable is a viable proposition because Hibernia Atlantic, the company behind it, is planning to sell a special superfast bandwidth that will have hyper-competitive trading firms and banks in the City of London and New York queuing to use it. In fact it is predicted they will pay about 50 times as much to link up via the Hibernian Express than they do via existing transatlantic cables.

    The current leader, Global Crossing's AC-1 cable, offers transatlantic connection in 65 milliseconds. The Hibernian Express will shave six milliseconds off that time.

    Of course, verifiable figures are elusive and estimates vary wildly, but it is claimed that a one millisecond advantage could be worth up to $100m (£63m) a year to the bottom line of a large hedge fund.

    Some City experts have criticised the growth in vast volumes of electronic trading, where computers automatically buy and sell stocks with no human input.

    The British firm laying the cable, Global Marine Systems, is plotting a new route that is shorter than any previously taken by a transatlantic cable. As closely as possible, it will follow "the great circle" flight path followed by London-to-New York flights.

    "We spent 18 months planning the route," says Mike Saunders, Hibernia Atlantic's vice-president of business development. "If it ever gets beaten for speed we end up giving our customers their money back, basically, so my boss would kill me if we got it wrong."

    And, he says, customers from hedge funds, currency dealers and exotic proprietary trading firms are queuing up for the switch-on in 2013.

    "That's the way these guys think," Mr Saunders says.

    "If one of them is on a faster route, they all have to get on it."

    Source: The £300m cable that will save traders milliseconds - Telegraph

    ---

    So there you have it - investors put money into 1 ms reduction in trade time because that's what makes them money rather than clever long term investment.

    And you know what, I welcome it! The reason is that long after those companies go bust there will still be another fiber optic cable connecting two continents!

  2. #2

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    Quote Originally Posted by AtW View Post
    The £300m cable that will save traders milliseconds



    Seabed survey work for the Hibernian Express, as the 6,021km (3,741 mile) fibre-optic link will be known, is already under way off the east coast of America.

    The last cables laid under the Atlantic were funded by the dotcom boom in the 1990s when telecoms infrastructure firms rushed to criss-cross the ocean.

    The laying of the new transatlantic communications cable is a viable proposition because Hibernia Atlantic, the company behind it, is planning to sell a special superfast bandwidth that will have hyper-competitive trading firms and banks in the City of London and New York queuing to use it. In fact it is predicted they will pay about 50 times as much to link up via the Hibernian Express than they do via existing transatlantic cables.

    The current leader, Global Crossing's AC-1 cable, offers transatlantic connection in 65 milliseconds. The Hibernian Express will shave six milliseconds off that time.

    Of course, verifiable figures are elusive and estimates vary wildly, but it is claimed that a one millisecond advantage could be worth up to $100m (£63m) a year to the bottom line of a large hedge fund.

    Some City experts have criticised the growth in vast volumes of electronic trading, where computers automatically buy and sell stocks with no human input.

    The British firm laying the cable, Global Marine Systems, is plotting a new route that is shorter than any previously taken by a transatlantic cable. As closely as possible, it will follow "the great circle" flight path followed by London-to-New York flights.

    "We spent 18 months planning the route," says Mike Saunders, Hibernia Atlantic's vice-president of business development. "If it ever gets beaten for speed we end up giving our customers their money back, basically, so my boss would kill me if we got it wrong."

    And, he says, customers from hedge funds, currency dealers and exotic proprietary trading firms are queuing up for the switch-on in 2013.

    "That's the way these guys think," Mr Saunders says.

    "If one of them is on a faster route, they all have to get on it."

    Source: The £300m cable that will save traders milliseconds - Telegraph

    ---

    So there you have it - investors put money into 1 ms reduction in trade time because that's what makes them money rather than clever long term investment.

    And you know what, I welcome it! The reason is that long after those companies go bust there will still be another fiber optic cable connecting two continents!
    6,021,000 metres / (299,792,458 metres/sec) = 0.02 seconds, or 2 milliseconds to travel that distance at the speed of light, max (would be less if going more directly, through the Earth). So even though bankers will forever be frustrated by the interminably slow and non-instantaneous nature of the speed of light for love of lots of money, there's still huge efficiency gains to be had there that aren't related to the length of the cable.

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    I've got cheaper way to solve problem - place fecking servers next to exchange on LAN, cuts down latency by factor of 10, new business model for exchange as well: server hosting.

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    Quote Originally Posted by AtW View Post
    I've got cheaper way to solve problem - place fecking servers next to exchange on LAN, cuts down latency by factor of 10, new business model for exchange as well: server hosting.
    Come to think of it, given that they've shaved off 3 times more time that it would take a signal to go the entire distance at the speed of light, it's likely something to do with the cable that's slowing things down. E.g. repeaters, which according to Wiki are 100km apart on some undersea optical cables. What they need is a bigger laser.

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    Quote Originally Posted by TimberWolf View Post
    (would be less if going more directly, through the Earth)
    BINGO! That's Plan B sorted

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    Quote Originally Posted by NickFitz View Post
    BINGO! That's Plan B sorted
    I (very briefly) wondered whether General Relativity would be important enough a consideration to play a part in determining the shortest path, or path of least time, making the shortest path part of a cycloid* (much as it would be if a marble were dropped down a frictionless tunnel connecting two points on the Earth's surface in the least time powered by gravity alone), but gave up on the idea of calculating gravitational effects very quickly. Maybe it would be the same path for light as it would be for the marble.

    * at least on a plane, trickier path on a sphere. Or maybe it's called a catenary, I forget.

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    Quote Originally Posted by TimberWolf View Post
    Come to think of it, given that they've shaved off 3 times more time that it would take a signal to go the entire distance at the speed of light, it's likely something to do with the cable that's slowing things down. E.g. repeaters, which according to Wiki are 100km apart on some undersea optical cables. What they need is a bigger laser.
    No, actually the secret is to have very very straight cable - big $$$ can buy that for you.

    HTH

    P.S. If they paid double the laws of physics would be changed too.

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    Quote Originally Posted by AtW View Post
    P.S. If they paid double the laws of physics would be changed too.
    No doubt subspace communications will eventually be invented to beat the other hedge funds to the arbitrage opportunities, rather than FTL offworld communication.

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    I went to a HFT conference recently looking for a job. The hedge fund guys believe a millisecond is a long time - they talk in terms of 100s of nanoseconds.

    The also can't believe how much money IBs make as they are run by total idiots.

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    Quote Originally Posted by TimberWolf View Post
    6,021,000 metres / (299,792,458 metres/sec) = 0.02 seconds, or 2 milliseconds to travel that distance at the speed of light, max (would be less if going more directly, through the Earth). So even though bankers will forever be frustrated by the interminably slow and non-instantaneous nature of the speed of light for love of lots of money, there's still huge efficiency gains to be had there that aren't related to the length of the cable.
    Light travels slower in optical fibre than a vacuum. You also need a repeater station every 100km or so.

    HFT will be banned within the next 10 years.
    While you're waiting, read the free novel we sent you. It's a Spanish story about a guy named 'Manual.'

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