Latency. Fairness. Sub-Microsecond Measuring. Anyone Can Do This. Right?
A month or so back we pointed out an article where a firm has developed the tools to measure latency for time-stamping in nanoseconds for HFT firms. So… milliseconds = thousandths of a second, microseconds = millionths of a second, and nanoseconds = billionths of a second. Got it…
Just a few days ago cPacket introduced a product to “measure one way latency” at sub-microsecond accuracy. Amazing technology! We realize how crucial latency is to the Information Arbitrage/ Latency Arbitrage Risk-Free Profit Extraction Modules (ie stealing) of the HFT firms, so this is an amazing step! We are excited for the HFT firms, retail investors, mutual fund investors, pension fund investors, 401k account holders, who can all co-locate and invest in the common technology (anybody can do it, after all) to play this game!
And play this game they had better: according to Tabb Group’s Bob Iati, over 30% of buy-side shares in the U.S. are now executed by algorithmic trading platforms, and that latency as little as 10 milliseconds could cause a firm to lose up to 10% of its revenues. “It’s a real, hot issue.”
If not being able to steal at 10 milliseconds is so damaging, I guess not being able to microsteal or nanosteal is absolute armageddon.