| Zero latency is the optimal trading speed that all firms | | | | idea of Central Proximity hosting is to find locations |
| hope to achieve at some point. But until that can | | | | that are central to most of the destination you need |
| become a reality, there is a race to keep reducing | | | | to access. There are a number of hosting locations |
| latency from all aspects of the trading process. From | | | | within the NJ/NY trading area: Clifton, North Bergen, |
| the server to the messaging to the sending and | | | | and Weehawken, NJ just to name a few that |
| receiving of data, each piece must be optimized to | | | | provide central proximity hosting. Central Proximity |
| reach the goal of zero latency. There are many | | | | Hosting enables firms to locate within a few miles of |
| avenues companies are looking at to reduce variables | | | | all the locations and data a trade strategy needs for |
| and risk to latency Ð one of those is proximity | | | | successful execution. So that makes up half of the |
| hosting. | | | | picture Ð how do you complete the race to |
| | | | | speed-of-light transport? |
| There are data centers where the trader can actually | | | | |
| collocate with the exchanges. For example, in | | | | The network provider does the rest. A Carrier is a |
| Weehawken, NJ there is a data center that houses | | | | good solution for the transport of data when latency |
| five major exchanges including: the American Stock | | | | and performance are important, but not critical. When |
| Exchange, Philadelphia Stock Exchange, and BATS | | | | latency reaches a level thatÕs critical to your |
| Trading. This is a way to ensure there is almost zero | | | | success and your strategic advantage, you need a |
| latency built into the trade to those exchanges. But it | | | | more agnostic approach to finding the best network. |
| is not the complete puzzle. Even with proximity | | | | In working with each Carrier, they will provide you |
| hosting to collocate within a data center that houses | | | | their Òon netÓ best solutions between locations. |
| exchanges there are still external servers that play a | | | | This approach is not always the best solution for |
| role in the execution of the trade. These are the | | | | your specific needs. And it is here that a network |
| data feeds, the platforms, your proprietary content, | | | | integrator offers you a measurable advantage comes |
| and the messaging. Even the data centers that host | | | | into play. |
| the exchange as a simple cross connect, are rarely | | | | |
| the only exchange a firm is trading on. So how do | | | | The network provider that you partner with must be |
| you close the gap? | | | | able to provide the lowest latency solutions for the |
| | | | | metro ring and the longhaul. The network integrator |
| While a firm may be trading a particular asset class | | | | you work with should be Carrier Agnostic, to ensure |
| and the majority of trades may be directed toward | | | | you are getting the optimal solution for your needs |
| a single venue, the volumes and price-points on | | | | and not a solution based on the relationship an |
| related exchanges play critical roles in execution | | | | integrator has with a Carrier. Some integrators, like |
| decisions. This means latency must be minimized from | | | | CFN Services, can even go a step further. Beyond |
| all data sources, not just the venue the majority of | | | | optimal solution recommendations for your specific |
| trades are placed on. For instance, having the lowest | | | | strategy and requirements, they can also create new |
| latency on venue A, but being significantly behind the | | | | routes specific to your priorities. An integrator like |
| market on venue B or C could have disastrous | | | | CFN Services can actually utilize optimal spans of |
| impact on success of a trade decision. ItÕs | | | | available fiber to create new fiber routes that do not |
| important then, to reach a delicate balance between | | | | exist along any single Carrier. |
| the lowest latencies on all data sources and | | | | |
| execution venues. | | | | In the race to Alpha, the combination of Central |
| | | | | Proximity Hosting coupled with the Low Latency |
| Where milliseconds and microseconds make a | | | | Transport is key to your success. |
| difference to the success of a trade strategy, the | | | | |