"We risk becoming the best informed society that has ever died of ignorance"
- Rubén Blades

"You can't make up anything anymore. The world itself is a satire. All you're doing is recording it"
- Art Buchwald

"It's getting exciting now, two and one-half. Think of everything we've accomplished, man. Out these windows, we will view the collapse of financial history. One step closer to economic equilibrium"
- Tyler Durden

"It is your corrupt we claim. It is your evil that will be sought by us. With every breath, we shall hunt them down."
- Boondock Saints

Monday, December 5, 2011

New York to London In 62 Milliseconds

We all know that co-location is a damaging component to those without it when it comes to trading.  The major houses fighting for the closest location possible to the exchanges will now have a faster, more direct line to Europe.  Emerald Networks has been tasked with laying the first ever submarine network across the Atlantic ocean, making the ghetto route already in place from Ireland to Europe appear slow since the new connection will enable data to travel from New York to London in about 62 milliseconds.  Seeing as this is one of those "everybody wins" deals thanks to the HFT lobby, Iceland will be able to regain its financial capital as it becomes the worlds data center due to the climate and currently established trading route.  This ought to make things incredibly interesting as the national laws, like REG NMS, will be ignored worldwide under the global cabal as exchanges now can be stuffed and gamed further as HFT tries to squeeze the last bit of credibility from the global financial markets.

One of the major problems is the increasing size of the data revolving around all this fast paced trading.  Consider this from NANEX:
The first chart shows the one-second peak quote rates. Note how the spikes at 10am, which were driven by significant news events in years past, pale in comparison to normal trading today. Those 10am events would always saturate and overload quotation systems. They still do, but at much higher levels.

You can see that the rates in 2007 (way at the bottom of the chart in black) were about 100 times lower than the peaks of today.

From ArticStartup
Currently the only high speed submarine cables leading to Iceland are coming from Europe, creating a roundabout trip for internet connections to hit North America. Emerald Netorks, [sic]  a new American submarine network company, is building one of the fastest neworks [sic] across the Atlantic that will branch from Ireland and Iceland, and head straight for New York. 

The new cable will cost around €227 million, and will provide a 100 Gbps connection across the Atlantic. This has great benifits [sic] for the high speed trading used by the financial sector--  expected round trip latency between New York and London is around 62ms. But it will also open up Iceland to become a new datacenter powerhouse.

Iceland sits conveniently between the U.S. and Europe, has a cold climate, has huge amounts of cheap and clean geothermal energy. Low latencies between two continents are a great plus, but the clean energy and the cool temperatures make it affordable to create and cool off the massive amount of heat given off by servers.

The Icelandic government is also supportive of datacenters. The parliament recently passed regulation stating foreign data centers do not need to pay value added tax. Currently there's already a couple datacenters operating out of Iceland with the "green" angle, like Greenqloud and Verene Global. But now datacenters should be able appeal to customers' desire for speed, with the added environmental benefit.

The Emerald Networks’ Emerald Express System features 6 Fiber Pairs and is designed at 100 waves x 100 Gbps each (60Tbit total). The mostly deep water route, up-armoring and deeper burial will ensure a high level of reliability. The system is scheduled to be ready for service by Spring, 2013.