Davealex, I haven't done the math, but I do intend to at some point in the near future. However, based on "gut feeling" I think that there could be a serious problem with the current NQDS bandwidth when decimalization rolls-in. And it's not an easy problem to fix - it will require changes by hundreds of users of the data feed.
NQDS (or "level 2") is delivered on a datafeed that is really quite unique. One aspect of it that might be taken as either a plus or a minus is that it is emminently "fair". That is, every customer gets the same data feed at the same speed. As far as I know, there is simply no way to "jump the line" and get a faster feed.
It's delivered on a single T-1 circuit, along with NTDS (trade data) and NASDAQ Level 1 data. The T-1 is subdivided into subchannels, with 3 90Kbit/sec channels delivering ranges of the alphabet of the NQDS data. The total bandwidth available for NQDS, then, is 270kbit/sec.
It's a "broadcast" technology, using UDP packets. MCI has a monopoly to deliver this data, and charges what I consider to be a pretty outrageous sum of about $6000/month for it. (In addition to the $150/terminal charge that NASDAQ charges.)
Now, that said, MCI has had to jump through some hoops to deliver this data reliably. You see, UDP wasn't designed for reliable delivery of data. It's a "datagram" service - the packets get tossed out there, and they might get to their destination and they might not. I presume that MCI has had to encapsulate this into some other protocol in order to insure reliable delivery, and/or had to over-build the network.
The advantage is that the there is no loading issue on the NASDAQ server. They send out a single stream of data, that is "broadcast" to everyone at once. There aren't individual connections between each customer and NASDAQ. Each one just "taps into" the stream.
One unfortunate side-effect of this is that there is no recoverability if a customer's connection goes down for some reason or another. If you don't catch the packets as they are thrown at you, they are lost and gone forever.
Probably more than you wanted to know... but the point is this... the maximum bandwidth is 270K is 270K is 270Kbit/sec. Of course, what data vendors do with it once they get it is their business, and most probably use other networking architectures to further disseminate the data. But they are choked by this 270Kbit/sec limit coming in.
I believe that this bandwidth is already saturated during peak periods. Decimalization is only going to make it worse. |
