Outsourcing High Performance Infrastructure in the HFT Ecosystem
2:30 - 3:20
In the past, market advantage was fueled by driving execution latencies lower with many of the gains coming from higher performance networking. Today, however, improvements in network latency performance have slowed due to a deceleration of latency gains in networking processors as well as the limitations of the speed of light. This has resulted in the commoditization of infrastructure. As the latency gains from the infrastructure continue to equalize, an opportunity to outsource the last of the high-performance infrastructure to a third party becomes viable. Additionally, sophisticated support services such as precision timing are becoming offerings from third parties. Fully utilizing these services allows the firm to concentrate its resources on the algorithms, new media content, and heuristic processing to better advantage the firm in the market. Today we will discuss the drivers to commoditization of the infrastructure as well as a holistic environment to support advanced trading methodologies.