Low Latency News

Available Now: 2010 Trading Beyond the Horizon

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In 2010, financial markets participants will continue to expand their trading activities as liquidity increasingly becomes fragmented, seeking alpha in new markets, best execution in dark pools, arbitrage opportunities across the order book and by implementing high frequency and complex, multi-leg, cross asset class strategies.

The successful operations – whether they be the proprietary desks of traditional broker/dealers, specialist high frequency and algorithmic traders, or quantitative hedge funds –  will leverage a trading infrastructure that combines high performance analytical, algorithmic and order routing platforms with the lowest latency access to multiple, geographically dispersed execution venues.

Multi-market trading – leveraging a fragmented market landscape – introduces new challenges, even for trading firms that have mastered the complexities of low-latency execution using approaches such as co-location and proximity.  Those mechanisms, while still relevant, provide a less complete solution when trading across markets that are geographically dispersed.

New entrants into the market for connectivity and proximity services include organizations that are themselves market participants, such as sell-side firms offering sponsored access and DMA, and liquidity venues, which are now providing global order routing networks, in some cases channelling order flow to their competitors.

Those service providers join traditional players including telcos, hosting companies and value-added extranet vendors, who often bundle trading applications with connectivity.

The bottom line: For multi-market trading, optimization of long-haul and metro communications links, combined with smart use of co-location, is an imperative for achieving the lowest latency, and this requires an understanding of connectivity offerings at a deep, granular level.

This  industry briefing explains the drivers for fragmentation and multi-market trading, the evolving landscape of market access, and explores connectivity approaches to minimize latency.

Check out the newest knowledgeportal to support low latency and dark fiber news and resources.

Sao Paulo is the HOT, NEW destination for the trade execution success in 2010! CFN Services offers the lowest latency exchange connectivity to BM&FBOVESPA.  From event to execution every millisecond matters; knowing that the connectivity is completely optimized provides your firm a competitive edge. Capacity is Limited, so call now for your Low Latency Guarantee.  While you are thinking about it, why not ask about our other locations: London, Toronto, Frankfurt, New York, Chicago, Tokyo, Korea and Singapore. For more info saopaulo@cfnservices.com

TradeTech USA 2010

February 22- 24, 2010

Marriot Marquis, New York, NY

Trade Tech USA is the largest and most renowned conference event in the North American region that is specifically designed to help with equity trading challenges faced by many.  Tech Trade USA 2010 offers:

• A mixture of leading decision makers, traders and professionals all under one roof aiming to create networking opportunities.
• Learn how industry leaders are planning to help generate alpha as the market structures change, fragmentation of liquidity increase and exchanges within the world continue to evolve throughout the upcoming fiscal year.
•  Experience an overall ‘Leading’ equity trading event with the latest strategies and innovations to help improve the quality of trading around the world. 

Some key events not to miss at TradeTech USA or Highlights of Trade Tech USA –

Finding a Single Solution for Global Connectivity, Tuesday, February 23, 2010 at 9:00 AM, where one can learn how to:

• Identify the advantages and costs of having a single point of entry into the global exchanges and trading venues.
• Uncover possible vendors that provide access to all market exchanges; including  what offerings must you evaluate as you compare vendors solutions, to optimize the current DMA or OMS systems for a greater global activity for your company.
•  Review the global connectivity system trends among the buy side; sell side, and the prop trading firms.

Guest Speaker, Charlie Rose Tuesday, February 23, 2010 at 11:45 AM. Here he moderates a panel that talks about: 

• The future of Capital Markets on a global scale.
• How to be leading the changes in the global business world, during this rough, international financial period.
• Meeting the challenges coming in the upcoming fiscal year. These challenges are:
  •  Finance industry and the changes in the employment trends.
  • Risk assessment, innovation, and the use of financial instruments, corporate policy.

TAMPA, Fla. – December 2, 2009 – Switch and Data (NASDAQ: SDXC), a leading provider of network-neutral data center and Internet exchange services, announced today that CFN Services, a leading ultra low-latency network and custom fiber optic network integrator in the financial industry, has joined Switch and Data’s GeoReach partnership program.  CFN will provide clients with turnkey or custom-designed, low latency interconnections to multiple regional exchanges from Switch and Data’s New York and Toronto Financial EcoCentersSM.  CFN FiberSource(r) Advisor provides professional services to assist financial firms in their regional or global network design, planning, and strategy to enhance their individual electronic trading strategies.

CFN Services, the low-latency leader, provides low-latency global exchange connectivity; offering specific ultra low-latency solutions for the trading areas in Toronto, Chicago, New York/ New Jersey Metro, Washington DC, Sao Paulo, London/London Metro, Frankfurt and Tokyo.   CFN is recognized as one of the only network providers to offer the Low Latency Guarantee along with a Latency Improvement Plan. The key to the integrated solution provided by CFN Services is the ability to identify metro fiber, long haul, and the collocation space to piece together the carrier networks onto one optimal path.   CFN sets itself apart from other transport vendors by offering carrier neutrality, professional services, fully managed services and the ability to design and implement custom fiber networks.

“We are proud to be part of Switch and Data’s new GeoReach program,” said David Conrad, Vice President of Finanical Market Sales, CFN Services. “CFN and Switch and Data can now deliver a complete low-latency solution in the most ideal market locations in New York and Toronto. Under this partnership, we can implement a competitive and comprehensive solution to the most demanding high frequency trading or latency-sensitive infrastructure.”

Switch and Data’s GeoReach partnership program is a select group of providers who have engineered their networks to meet the needs of the high frequency trading community. GeoReach partners have engineered optimum paths from Switch and Data’s EcoCenters to each of the regional liquidity providers that satisfy the requirements of the most latency-sensitive infrastructure. Firms can focus on their core and add each new ATS or Exchange using a low cost, minimal footprint while still maintaining ultra low latency communication across the markets.

“Adding CFN Services to our GeoReach partner program in our New York and Toronto Financial EcoCenters enhances our ability to offer customers ultra-low-latency connectivity to their desired exchanges,” said John Panzica, Vice President of Switch and Data’s Financial Services Practice.  “As more customers utilize trading strategies across the entire market landscape, a selection of optimized paths to the region’s liquidity providers becomes ever more crucial. CFN’s continual optimization creates a compelling story for firms seeking to stay ahead of the curve.”

GeoReach Partners are a critical element of Switch and Data’s Financial EcoCenters which provide mission-critical infrastructure to meet the security, volume and low-latency requirements of the electronic trading community.  These EcoCenters aggregate an ecosystem of the pre and post- trade service provider, buy-side and sell-side communities into Switch and Data sites located in the geographic center of the major liquidity providers in New York and Toronto.

About CFN Services

CFN Services, the Low Latency Leader, is a managed telecom infrastructure services company providing network services for the Enterprise, Public Sector and Carrier Markets, specializing in network design, planning, deployment, and managed services, including: Low Latency Global Exchange Connectivity, Global, Regional and metro network design and cost optimization and mobile backhaul optimization

CFN Services specializes in Data Center optimization ensuring the long haul network enhances the Enterprise distributed network strategy. CFN Services leverages FiberSource®, a global knowledge-based platform that can view all available dark and lit fiber, collocation, and lit buildings; providing the ability to quickly identify and design ultra low latency solutions. Learn how CFN Services can ensure you are Optimizing the Power of your Network www.cfnservices.com

About Switch and Data

Switch and Data is a premier provider of network-neutral data centers that house, power and interconnect the Internet. Leading content companies, enterprises and communications service providers rely on Switch and Data to connect to customers and exchange Internet traffic. Switch and Data has built a reputation for world-class service, delivered across the broadest colocation footprint and richest network of interconnections in North America. Switch and Data operates 34 sites in the U.S. and Canada, provides one of the highest customer satisfaction scores for technical and engineering support in the industry, and is home to PAIX® — the world’s first commercial Internet exchange.

Important information about Switch and Data is routinely posted to the investor relations section of the company’s website www.switchanddata.com. For copies of all Switch and Data press releases and SEC filings, please visit the website. To automatically receive Switch and Data financial news by email, please visit the website and subscribe to Email Alerts. Investors are encouraged to check Switch and Data’s website frequently to access the most up-to-date information.

From Traders Magazine Online News:

Interest in high-frequency trading is at an all-time high, but profit-taking from high-frequency trading strategies focused on low latency is getting tougher.
“The window of opportunity to get into high-frequency trading is almost closed,” said Mark Casey, president of CFN Services, a network provider. He defined high-frequency trading as strategies whose underpinning is low-latency order placement and execution.
“If you’re competing primarily on latency, it’s very, very, very, very difficult,” added Nigel Faulkner, chief technology officer for the equities technology group at Goldman Sachs.
The cost of the technology and infrastucture needed to support high-frequency trading is “tens of millions of dollars” per year, according to Kevin McPartland, a senior analyst at financial services research firm TABB Group. He moderated a panel sponsored by TABB Group and Switch and Data, a data center operator, last Thursday. This article is based on the panel discussion.
Low latency is necessary, McPartland said, to process market data faster than competitors. And high-frequency trading, which encompasses a range of strategies, depends on that data. “It’s like you’re seeing the Wall Street Journal five microseconds into the future,” he said.
High-frequency trading firms must be concerned about latency, but that level of concern should depend on “how much profit they intend to make from every millisecond or microsecond,” Goldman’s Faulkner said. He noted that firms must understand the “value of a micro or milli” for the particular strategy they’re running.
“The infrastucture isn’t the barrier” for firms interested in high-frequency trading, CFN’s Casey told the audience. The barrier is competition. In his view, competing with the most latency-focused firms is a tough, elite game because, at that level, microseconds count. A microsecond is one-millionth of a second, while a millisecond is one-thousandth of a second.
According to a recent TABB report on financial services data centers, the financial services industry spends $1.8 billion for co-location and private facilities to support fast direct access to market centers. Broker-dealers account for half of that sum, or $900 million. Exchanges represent 23 percent, proprietary trading firms 13 percent, asset managers 10 percent and hedge funds 4 percent. That report was published in March, but the figures remain accurate, McPartland said, based on TABB’s ongoing research on data centers and trading, including for an upcoming report on sellside technology focused on U.S. equity infrastructure.
McPartland noted that bulge-bracket firms will often have four or five primary data centers to support their own equities trading and the trading of their clients, and 10 or more co-lo sites in the U.S. All brokers, he said, use co-lo at some level, with many operating in at least two or three co-lo sites.
McPartland added that housing servers within an exchange’s data site is costlier than placing the servers near the facility, such as across the street. The chief features behind a firm’s choice of a data center are cost (which is important to 57 percent of firms), exchange proximity (48 percent), space in the data center to expand (33 percent) and power reliability (29 percent), according to TABB. Additional concerns are service, security, control and network neutrality.
CFN’s Casey said that “proximity trading” has exploded over the last couple of years. Proximity trading refers to strategies that depend on low latency by installing computer servers near a market center’s matching engine.
One of the changes in the marketplace in recent years that has fueled high-frequency trading was regulation. In 2007, the Securities and Exchange Commission’s Regulation NMS went into effect. Reg NMS lay down a set of rules to modernize the markets, but it also made the landscape more fertile for high-frequency trading firms. Casey noted that execution strategies that used to be implemented just on Nasdaq, for instance, have given way to more inter-market trading strategies.
But regulation wasn’t the only significant change. The TABB study found that the “game-changing technology” that spurred the growth of high-frequency trading was bandwidth availability and the relative low cost of buying bandwidth. “That’s what is letting equities volume be eight-to-nine billion shares per day,” McPartland said.
Several panelists pointed out that while speed is vital, not all high-frequency trading depends on extreme low-latency. Nor is all low-latency trading high-frequency, CFN’s Casey said. Still, Goldman’s Faulkner observed that “if it’s high-enough frequency, it must be low latency.” He added that “we increasingly see that the benchmark [for high-frequency trading firms] is low latency.”
As more firms now get into high-frequency trading, their infrastructure development has taken different paths. George Hessler, executive vice president at Lime Brokerage, said he thinks the balance for many firms is tipping toward renting components of the technology and infrastructure, rather than building them from scratch. He added that as consolidation takes place in this part of the trading-services industry, the hardware and software services are improving dramatically. Lime services many high-frequency trading clients.
Goldman’s Faulkner, however, said that it would be hard for a truly latency-sensitive firm to be satisfied with vendor products. For big banks, he added, servicing these firms has also become more complex because their needs are different from the traditional needs of high-volume clients. “We’re having to change the mix of our application developers,” he said.
Firms that are really latency-sensitive must pull out all the stops to account for every microsecond, since that affects their profitability. They must “account for the last 100 microseconds they can’t find,” and be able to figure out if the latency is in the code, switches, applications or elsewhere, Faulkner said.
UBS has a “strong bias” to build rather than rent the various components necessary to support high-frequency-trading firms, according to Josh Schubkegel, executive director for client-facing technology at the big bank. He noted that some clients want to get “close to the metal” and do everything themselves, while others do not.
Schubkegel noted that the focus on serving high-frequency firms has also benefited other clients at some of the big banks. UBS, he said, has leveraged some of the technology platforms developed for high-frequency traders for its direct market access and algorithmic trading business.

Mark Casey, President of CFN Services, will be discussing the ability to mitigate risk from your low latency connectivity strategy utilizing a solution that alleviates dependency on single source providers and provides an integrated hosting and connectivity strategy.  Mark brings his experience from his over year 20year history  in telecommunication networks having worked at such companies at AT&T, MCI and CSX Fiber Networks. Mark Casey was the managing director of CSX Fiber Networks and spearheaded the spin off of CSX Fiber Network  to form what is now CFN Services.  CFN Services also acquired the proprietary asset FiberSource® which is a knowledge-based platform delivering access to over 550 carrier networks globally including more than 100 submarine systems; providing direct visibility into all available dark and lit fiber options, collocation facilities, and metro fiber rings for optimal deployment to any global financial center worldwide. This experience and tool set provides Mark the ability to have a deep understanding and knowledge required for an Global Connectivity Exchange Solutions.

Event Name: Switch and Data Presents: Financial Market Structure: Panel Event

Event Date: 11/19/2009 – 11/19/2009

Event Location: Helmsley Hotel, 212 East 42nd Street, NY, NY 10017

Panelist:

Host:
John Panzica, Vice President, Financial Services Practice, Switch and Data

Moderator
Kevin McPartland, Senior Analyst, TABB Group

Panelists
Nigel Faulkner, Managing Director, CTO Equities Trading, Goldman Sachs
George Hessler, Executive Vice President, Lime Brokerage
William Warner Director, Sales Engineering, Reliance Globalcom
Mark Casey, President, CFN Services, Incorporated
Josh Schubkegel, Exective Director, Client Facing Technology, UBS

Event Description: Financial Market Structure: Architectural and Infrastructure Challenges in the New Trading World Many new material changes have firms overhauling their trading infrastructure. How does your overall strategy stack up against the next guy? Join us for a panel discussion about the latest trends and challenges that have firms re-designing for 2010.

Event Website: http://www.switchanddata.com/Financial/Fall-Event

A-Team Group Poll

In today’s financial markets, trading firms face constant pressures in a fiercely competitive environment. Providing best execution and superlative customer service is fundamental to attracting order flow. Running trading operations efficiently is also an imperative, to minimize costs internally and to offer best value to customers. Despite the increase in recent years of automated and algorithmic trading, the human touch is as important as ever in financial trading. Traders bring a wealth of experience to the art of trading, even when it is driven by computer-generated indicators. Their experience and relationships are vital to seeking out liquidity and efficient execution.

Trading operations overall need to be agile and flexible in order to meet ever changing demands and to rapidly exploit business opportunities. The regrouping of traders to react to – even pre-empt – market demand, requires trading positions that can be immediately configured to individual trader’s preference and information needs. At the same time, management and operational costs of trading operations need to be driven down in reaction to the ever downward pressure on margins. Whether costs are reduced through sharing of information services, through a reduction in maintenance costs, or change management costs, it all adds to the bottom line.

Fortunately, new approaches to trading room design, allowing the remote deployment of both servers and desktop PC hardware, together with dynamic allocation of resources to facilitate ‘hot desk’ working address these key requirements for agility, flexibility, manageability and cost containment.

This industry briefing explores offerings from WEY Technology and presents real-life benefits as experienced by Sydbank, a leading Danish bank.

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Optimizing the Power of your Network

Electronic Trading Firms are expecting a lot more from their network providers when it comes to low latency. It is a well-known fact, that faster is better when it comes to many things in the world. In the Electronic Trading industry being first in the queue is not just better, it can mean millions of dollars uplift. When millions are at stake, every aspect of the equation needs to be evaluated. CFN Services is now providing Electronic Traders a new aspect to their low latency goal. In the race to Alpha, there is a new variable in the mix.  Learn More

WSTA Resource Guide: CFN Services

CFN Services is a managed infrastructure services company providing network services for the Financial Markets, specializing in network design, planning, deployment, and managed services, for ultra- low latency networking. CFN Services leverages FiberSource®, a global knowledge-based platform that identifies all available dark and lit fiber, collocation, and lit buildings; providing the ability to quickly identify and design optimal ultra-low latency solutions.

Contact Information:
www.cfnservices.com
Judy May
lowlatency@cfnservices.com
703.788.6534
2325 Dulles Corner Blvd 5th Fl
Herndon, VA 20171