MIT's Technology Review, which is well read among technology and business leaders, highlights the growth of high frequency trading (HFT) in Trading Shares in Milliseconds. The article examines the low-latency market through the eyes of several firms specializing in high frequency trading, but then shifts into a lengthy discussion of potential risks presented by the trend.
The piece includes some data on the shift of trading volume to electronic platforms, which now account for 61 percent of daily trading. The Tabb Group estimates that high frequency trading generated an estimated $8 billion in profit in the first nine months of 2009.
"Trading is now essentially a virtual art, and its practitioners put such a premium on speed that NASDAQ has considered issuing equal 100-foot lengths of cable to the brokers who send orders to its exchange servers," the Technology Review piece notes.
Low latency trading has become a big business for a number of players in the data center space, especially Equinix (EQIX) and Savvis (SVVS). The major players in low latency trading are making big investments in the space, which have made northern New Jersey one of the hottest data center markets in the country
For more on this topic, check out our High Frequency Trading Channel or see these resources:
- Can High Frequency Colo Support Many Players?
- NYSE Euronext's Future: The Data Center
- NASDAQ OMX Group Expands Colo Deal with Verizon
- Equinix Plugs Into Even Lower Latency