Low Latency News

Alpha Alliance™ Enables Trading Services Firms to Collaborate and Deliver Industry-Leading Solutions for the Global Financial Markets

Herndon, VA (PRWeb).  July 27, 2011 — CFN Services, Inc., the leading provider of managed high-frequency trading enablement services, today announced the Alpha Alliance™, an innovative network of trading services firms delivering fully integrated and customizable solutions for the global electronic trading market.  The Alpha Alliance brings together best-of-breed trading technologies, applications, and services across the full trading life cycle, from analysis and decision-making, to risk management, execution, and settlement of the trade.

Alliance partners deploy their solutions on CFN ’s Alpha Platform™, a low latency trading infrastructure offering the highest performance for market data delivery and trade execution worldwide.  Technology partners rapidly deploy their applications and services on a proximity hosted platform as part of a comprehensive solution, improving application delivery performance while lowering costs and expanding access to new markets.

Alpha Alliance partners collaborate to develop full service enhanced, customized solutions that best advance the unique trading strategies of their clients. With access to the technical capabilities and market-specific expertise within the Alpha Alliance network, clients and business partners interact in completely new ways.  Trading firms ultimately benefit from having access to the market-leading solutions necessary to remain competitive in today’s rapidly evolving financial markets.

“CFN is very excited to play a pivotal role in taking automated trading solutions to the next level,” said Mark Casey, President of CFN Services. “Bringing the best technology, product and service firms together on one platform enables next-generation trading solutions capable of fully leveraging the rapid growth in global electronic trading. Alpha Alliance members are setting the standard for high performance trading.”

To find out now how Alpha Alliance can bring your trading solutions to the next level

About CFN Services in the Global Financial Markets
CFN Services is a leading provider of managed high-frequency trading enablement services, providing solutions that accelerate market data delivery and trade execution for some of the most sophisticated financial markets participants worldwide. CFN Services operates the low-latency  Alpha Platform™, a high performance low latency global infrastructure that accelerates trading performance for automated traders across key liquidity venues in the equities, options, futures, derivatives, and FX markets. CFN is the sponsor of the Alpha Alliance which is setting the standard for next generation infrastructure and providing leading edge trading solutions. For more information visit CFN Services website

About CFN Services

CFN Services provides high performance network and application delivery solutions for real-time, mission critical applications. Leveraging FiberSource^®, a global network optimization platform, CFN Services builds low-latency private cloud solutions to solve the performance challenges of latency and jitter in distributed IT environments. Whether the application and data are dispersed across town or around the globe, CFN Services deploys turnkey solutions within and between public and private data centers in North and South America, Europe, and Asia. For more information: http://www.cfnservices.com

Press Contacts:

Judy Misbin-May, CFN Services

+1-703-788-6633

judy.misbin-may@cfnservices.com

Telehouse America is seeking to leverage some of its data center real estate to gain a piece of the growing market for colocation space to support high-frequency trading. The company said today that it has colo space and power available in its New York data center facilities at 25 Broadway and 7 Teleport in Staten Island for clients seeking low-latency connectivity.

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

LONDON & KANSAS CITY, Mo.–(BUSINESS WIRE)–BATS Europe, an innovative and technology-leading European Multilateral Trading Facility (MTF), plans to continue inverted pricing for the NYSE Euronext indices — CAC 40, AEX and BEL20 — and select exchange traded funds (ETFs) through July, and will also reduce the liquidity removal fee for those securities to 0.25 bps as of the 1^st of July.

In addition, following the successful launch of three pilot ETFs, BATS Europe is further expanding its stock universe by adding 20 actively traded ETFs. All ETF instruments will be included in the inverted pricing schedule for July.

In June, BATS Europe has set one-day market share records in the CAC 40 (7.55%), AEX (5.37%) and BEL20 (4.60%) as well as in major indices in London (6.40% in the FTSE 100) and Germany (5.65% in the DAX).

“We thank our participants for their tremendous response to our inverted pricing in June and are pleased to extend the special into July whilst offering further incentive for participants to trade their CAC 40, AEX, BEL20 and ETF order flow on our efficient and reliable trading platform,” said Mark Hemsley, CEO of BATS Europe.

BATS Europe recently recorded one-day notional value and overall market share highs in June of €1.24 billion traded with a 4.02% share of the European market.

BATS Exchange, BATS Europe’s sister company in the U.S. and the world’s third-largest securities exchange operator in terms of notional value traded, ran similar inverted pricing schedules in January 2007 and September 2007 and gained significant market share on both occasions, growth which continued after BATS Exchange returned to its normal pricing plan.

For more information, participants can contact the BATS Europe Trade Desk (+44-207-012-8901, TradeDeskEurope@batstrading.com) or their account manager.

About BATS

BATS Global Markets (BATS) is an innovative global financial markets technology company headquartered in the Kansas City, Mo., area with additional offices in New York and London. The BATS platform was launched in January 2006 and, operating as BATS Exchange, Inc. is one of the fastest growing, top tier equity markets in the United States. BATS serves the European market through its London based, FSA-authorised subsidiary, BATS Europe, which operates a Multilateral Trading Facility for European securities. The BATS platform is internally developed by a dedicated core team of market and technology professionals, catering to the needs of the broker-dealer and trading community. BATS … Making Markets Better.

Zero latency is the optimal trading speed that all firms hope to achieve at some point. But until that can become a reality, there is a race to keep reducing latency from all aspects of the trading process. From the server to the messaging to the sending and receiving of data, each piece must be optimized to reach the goal of zero latency.  There are many avenues companies are looking to reduce variables and risk to latency – one of those is proximity hosting.

There are data centers where the trader can actually collocate with the exchanges. For example, in Weehawken, NJ there is a data center that houses five major exchanges including: the American Stock Exchange, Philadelphia Stock Exchange, and BATS Trading. This is a way to ensure there is almost zero latency built into the trade to those exchanges. But it is not the complete puzzle. Even with proximity hosting to collocate within a data center that houses exchanges there are still external servers that play a role in the execution of the trade. These are the data feeds, the platforms and the messaging. Even the data centers that host the exchange as just a cross connect, rarely are they the only exchange a firm is trading on. So how do you close the gap?

The idea of Central Proximity hosting is to find locations that are center to most of the locations you need to access. There are many hosting locations within the NJ/NY trading area: Clifton, North Bergen, and Weehawken, NJ just to name a few that provide central proximity hosting. Central Proximity Hosting is getting within a few miles of all the locations a trade needs to execute.  So that makes up half of the picture – how do you complete the race to speed of light transport?

The network provider does the rest. A Carrier is a good solution for the transport of data when latency and performance are important but not critical. When latency reaches the level of critical you need a more agnostic approach to finding the best network. In working with each Carrier, they will provide you their “on net” best solutions between locations. That is not always the best solution for your specific needs. This is where a network integrator comes into play.

The network provider that you partner with must be able to provide the lowest latency solutions for the metro ring and the longhaul. The network integrator you work with should be Carrier Agnostic, to ensure you are getting the optimal solution for your needs and not a solution based on the relationship an integrator has with a Carrier.   Some integrators, like CFN Services, can even go a step further. They not only can make recommendations as to the optimal solutions for your needs, but they can create new routes specific to your priorities. An integrator like CFN Services can actually utilize optimal spans of available fiber to create new fiber routes that do not exist along any single Carrier.

In the race to Alpha, the combination of Central Proximity Hosting coupled with the Low Latency Transport is key to your success.