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Technology Stocks : The *NEW* Frank Coluccio Technology Forum -- Ignore unavailable to you. Want to Upgrade?

To: ftth who wrote (34712)	7/31/2010 2:57:53 PM
From: aladin	Read Replies (2) \| Respond to of 46821

ftth, Your thoughts here are right on the money (pun fully intended). The colo distributing the Exchange feeds to the algorithmic brokers was sued because there was a perception that some servers processing certain trades for a particular broker had an advantage because they were closer (physically) to the source from the provider - that drove the cable length decision. Port and card assignments are done in one case I know about by lottery. Essentially the cable length issue is an attempt at fairness - the feed provider does not discriminate (creating a legally defensible position and killing the lawsuits). What the legal profession has done to us :-) Your also correct that the processing element has more latency than the physics (if you are in the NY Metro - and all algorithmic trading is done near an exchange). This is why trading programmers who can tweak the code extremely tight can make 300k+ bonuses. But they still chase the physical elements and will move between Cisco, Juniper, Force10 or Arista gear as the testing dictates. Will use intra-rack copper, SM or MM as indicated as well. (You are correct on the latency differential between MM and copper). For example - if a trader thought SM bought even a tiny advantage - even with a substantial capital difference - everything that could be would be SM. All the folks here are very proprietary and share as little as possible with my team. John