The high speed trading algorithms have gotten so ridiculous that microseconds matter. A one mile change in length of the wires/fiber optic cables means a 5.3 microsecond change in one direction communication speed. They don't want to move if they don't have to.
I wonder what craziness is going on in the market with moving the official trading to Chicago, unless they have everyone's trades still going to the computer in New Jersey and then sharing a common communication path to Chicago to change the trading computers' reaction speeds. Otherwise a broker based in Chicago suddenly gets a leg up over the ones in New York.
“The high speed trading algorithms have gotten so ridiculous that microseconds matter. “
If the exchange moves then other businesses (brokers) will follow then.
They can if they want to save a ton in prospective taxes, if that is what it comes down to.
The HSTs will just follow the exchange servers. They are run just by software anyway.
I was thinking along similar lines, although the distance is a lot closer. Institutional traders have their servers co-located with the exchange servers. Cable distance is measured in feet. I would assume (nasty word) the co-located servers are part of the fail over site in IL and that there are SLA's in place that offer a specified maximum latency. Despite that smaller firms that cannot afford to be co-located get hit the worst.
The real issue is that if NYSE moves the computers, the traders will follow them and NJ will lose the income tax these guys pay to the state. The jobs are very high paid.
OTOH, I doubt the RATs that run the state are smart enough to realize this.
“The high speed trading algorithms have gotten so ridiculous that microseconds matter. A one mile change in length of the wires/fiber optic cables means a 5.3 microsecond change in one direction communication speed. They don’t want to move if they don’t have to.”
correct, all of the client computers trading against the NYSE computers have to have the shortest possible fiber cables between themselves and the NYSE computers, so they all would be forced to move in unison ... but still, i’m sure that would be preferable to everyone involved compared to paying a transaction tax, a tax sure to grow arbitrarily in size as power hungry government continuously seek deep pockets to pay for they profligate ways ...
This point on the transit time is one touted revenue source for StarLink as a competitor for fiber. The signal can travel through a satellite link with about 40% less delay between two points on the Earth, than fiber optic cable provides.
>>The high speed trading algorithms have gotten so ridiculous that microseconds matter. A one mile change in length of the wires/fiber optic cables means a 5.3 microsecond change in one direction communication speed. They don’t want to move if they don’t have to.
Only the relative distance matters; the big boys are generally collocated with the exchange.