Lehman, NYSE, CME, Forex Find Better Ways for Efficiency

When it comes to questions being answered, Wall Street executives usually have one that definitely needs answering as they begin touring the New York Stock Exchanges data center.

The Talk of the Town

When the Wall Street executives tour the New York Stock Exchange data centers, they check on the servers which they have collocated. The executives then ask one very important question- “Who is hosted in the other cabinets?” and this is followed by, “What is the reason behind the fact that their own cabinets are not closer the NYSE’s servers?” Steve Rubinow, the Stock Exchange’s CTO, shares that they all share an intense amount of obsession for what they do and that they continually try to figure out ways for them to perform faster. This goes even if at certain instances, the amount of acceleration when it comes to them performing their work is simply negligible. Rubinow further adds that such desire and obsession to perform at a faster pace is a constant topic of conversation among them in their field. He says that someone asks himself how it will be possible for him to shave off a few microseconds when doing his work. And this is driven by the thought of considering doing without these microseconds here and there will eventually add up; thus saving a worker time and this enables one to perform at an efficient pace.

Being the First

In this field, there are numerous firms involved in the trading. To survive in this business, very firm employs certain trading strategies to succeed; but quite frankly, many firms have similar trading strategies. And since a huge number of firms involved in this field share similar trading strategies, they more often than not, end up racing against each other in doing their work. The desired outcome is to identify a new opportunity for success, and to execute necessary action before anyone else. The one who gets to do this is the one who wins.

Latency

It must be noted that in this field, latency carries more weight when it comes to affect when compared to execution. In addition, latency also has an impact on price and as well as the distribution of important data inside a given enterprise.

The Tiny Solution

Truth of the matter is, there is one significant detail that must be taken note of when it comes to doing all that is necessary to perform at the optimal speed and efficiency. One such detail has the potential to become the solution needed by firms who often find that they are always coming short of the competition. And this solution is to move a server rack closer to an exchange server. This would pave the way for a more efficient performance from the firms by saving nanoseconds. This time increment is too small and possibly too statistically insignificant to affect even the most time-sensitive of algorithmic trading programs, but all firms need all the help they can get. And Rubunow adds that at an exchange, collocating servers certainly does reduce the delivery time of essential market data. More specifically, the delivery time of such information is reduced by milliseconds, and this undeniably delivers an impact.