Microwave vs. Fiber
In the past, increasing trading network speed focused on various parts of the network infrastructure including switches, software, TCP offload devices, and other components. But to support HFT, obtaining and acting on real-time equities, options, and other financial information microseconds faster than competitors is paramount. For these networks, with trading and information centers often separated by hundreds of miles, the goal is ultra-low latency, and variations in transmission delay can make millions of dollars' worth of difference to high-frequency traders.
While fiber can deliver adequately high speed over short distances, such as found within a data center building, it suffers latency delays of about eight microseconds per mile over longer distances. For example, for one of world's most popular routes from Chicago to New York, typical round trip latencies with adequate transmission capacity measure around 16 milliseconds for premium "dark fiber" service (a connection that doesn't have to be shared with other customers).
Microwave, on the other hand, is nearly twice as fast as the speed of fiber over long distances, making wireless transmission the ideal choice for trading, not for the entire market but for a select group -- such as HFT traders -- with a clear strategy and algorithmic tools who can truly benefit from the faster transmissions. Microwave's advantage over fiber stems from two factors. First, microwave links are shorter, because signals can be beamed across the most direct path between two points, while fiber routes are usually much longer due to rights-of-way restrictions. Second, since electromagnetic wave transmission speed is inversely proportional to the density of the medium, microwaves are naturally faster than fiber optic waves due to the higher density of glass vs. air. In the Chicago - New York example, the currently installed Exalt microwave systems transport data at 8 milliseconds round trip vs. the fastest fiber network at 13.1 milliseconds. Furthermore, while fiber has already reached its minimum potential latency, microwave technology continues to evolve toward even lower latencies.
Not All Microwave is Equal
Once microwave has been chosen over fiber, the very next consideration is to choose the microwave radio vendor and type of systems. With the goal of minimizing the overall latency for a particular route, network planners must simultaneously seek to minimize the number of microwave links and the average latency per link, while maximizing system availability and transmission capacity. Other parameters in network planning are the choice of frequencies, site-specific conditions, and equipment configurations. To optimize this set of complex, interrelated parameters, Exalt has applied its advanced DSP and RF technologies specifically geared toward ultra-low latency designs. The company's unique technology, Exalt Adaptive Latency Control, is a breakthrough approach to slashing latency in HFT networks with superior ease of deployment, diagnostics, and economics. (For more specific information, refer to related press release at www.exaltcom.com/HFT-ALC.aspx).
To support the growing needs and the evolution of HFT networks over the long term, Exalt offers, in addition to ultra-low latency, the greatest flexibility in frequency band selection, radio form factor, noise characteristics, reach, and availability to create the optimum network path over hundreds of miles.
About Exalt Communications
Exalt Communications provides next-generation packet microwave backhaul systems to mobile operators, broadband service providers, government agencies, and enterprises worldwide. Exalt wireless systems are used most often as a complement or cost-effective alternative to fiber. They also have been inherently designed to support the rapid build out of the LTE mobile Internet infrastructure driven by ever growing user-generated traffic and fueled by the accelerated adoption rate of smartphones and tablets. www.exaltcom.com
For further information, contact:
Vice President, Marketing - Outbound & Channel
Exalt Communications Inc.
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