HFT Shenanigans: Microwave Trading And Gold Futures (Again) first appeared on Floating Path.
Every week Floating Path looks to highlight some of the crazier examples of HFT running amok in the markets while bringing to light developments relating to the high frequency trading industry.
Trading With Microwaves
High frequency traders recently got faster, a lot faster. Thanks to a relay of microwave towers, data which once could only be transmitted back and forth from centers in Mahwah and Aurora in a painstakingly slow 194,865,097 meters per second now makes the trip in 284,802,835 m/s. The upgraded speed is approximately 95% of the speed of light and takes 4.13 milliseconds to cover the roughly 800 miles of distance, according to the L.A. Times.
New York-based Strike Technologies, along with a few other companies, is working feverishly to build microwave networks between data hubs in the Chicago and New York suburbs that handle nearly all of U.S. trading. While for now, only the deep-pocketed firms are benefiting, the technological arms merchants hope to spread their speed-giving services to the masses.
If everyone — retail brokerages, public pensions, hedge funds — knows simultaneously where stock and futures markets are moving, the firms with the deepest pockets won’t necessarily have an edge, they say.
Gold Futures (Again)
Just like last week, a large order to sell gold futures dropped the price $10 and halted trading for 20 seconds. This chart from Nanex clearly shows the drop and subsequent halt.
Other HFT News
Recently we’ve seen the attempted expansion of high frequency trading into Singapore and even Shanghai. Now Abu Dhabi has joined in the luring of HFT with brokerage ADS Securities launching a new platform designed with high frequency trading in mind.
Initially begun as a trading tool for currencies and bullion, OREX Optim has cost ADS “tens of millions” and will soon be available for traders with as little as $10,000 to trade a multitude of assets including commodities and equities. After trading volume surged from $5 billion to $8 billion over the past year, CEO Stephen Davie has the industry’s attention and is obviously confident in the future.
“We started a soft launch of the platform for forex [foreign exchange] six months ago and we will be rolling out other asset classes such as commodities and equities next year,” Mr Davie said. “Day trading is coming back.”
