A Million Dollar Reason Why Stock Trading Delays Must Be Fixed Fast
Delays in data center networks can now be detected that are as short as a millionth of a second. Computer programmers have created a clever software program that can save investment banks running automatic stock trading systems millions of dollars.
The work was presented on August 20th, 2009 at SIGCOMM. The computer programming method was created by a joint task collaboration between the University of California and Purdue University computer programmers.
This small programming code can detect delays as short as a millionth of a second in a router. The code will also detect packet loss as small and rare as one packet loss in a million. Every router in a data center can run this small code.
No new hardware is required. The team of computer programmers call their code the Lossy Difference Aggregator. The programming code has no speed penalty on the router in which it runs.
Online brokers houses and stock trading platforms will love this new technology. The reason is that if you can get into a trade faster than everyone else, their buy orders will push up your position. A delay of even 100 microseconds over an incoming stock data feed can cause your buy and sell orders to be behind that of competing brokerage houses.
Exchanges like the Nasdaq use very expensive custom hardware designed to track delays in the performance of routers at different key points within a data center network. But these hardware boxes are too expensive to be added to every router within a data center's network. Especially if that data center is running an automated stock trading system. By the time the I.T. Department detects a problem router, it usually costs the company 1 - 3 million dollars in delayed entry and exits on trades.
This approach will allow router vendors to add fine scale delay and loss tracking at every router for little if any cost. This will obsolete expensive external network monitoring boxes at every router.
The way a router's performance is measured now is that an external hardware device tracks when a packet arrives and when it leaves and then takes the difference of those times.
Instead of tracking the entry and exit times of all packets going through a router, this computer code randomly divides the incoming packets into groups and then calculates the entry and exit times of each group. As long as the number of losses is smaller than the number of groups, at least one group will give a good estimate.
Calculating the difference of the groups arrival and departure times and then dividing by the total number of messages gives a very accurate estimate of the average delay of a given router. This approach requires so little computer programming code that it really is about the same code as a simple counter.
A data center network that has this programming code built in to every router will be able to quickly pinpoint a faulty router that is adding an extra millionth of a second delay or that is losing one packet in ten million. - 23196
The work was presented on August 20th, 2009 at SIGCOMM. The computer programming method was created by a joint task collaboration between the University of California and Purdue University computer programmers.
This small programming code can detect delays as short as a millionth of a second in a router. The code will also detect packet loss as small and rare as one packet loss in a million. Every router in a data center can run this small code.
No new hardware is required. The team of computer programmers call their code the Lossy Difference Aggregator. The programming code has no speed penalty on the router in which it runs.
Online brokers houses and stock trading platforms will love this new technology. The reason is that if you can get into a trade faster than everyone else, their buy orders will push up your position. A delay of even 100 microseconds over an incoming stock data feed can cause your buy and sell orders to be behind that of competing brokerage houses.
Exchanges like the Nasdaq use very expensive custom hardware designed to track delays in the performance of routers at different key points within a data center network. But these hardware boxes are too expensive to be added to every router within a data center's network. Especially if that data center is running an automated stock trading system. By the time the I.T. Department detects a problem router, it usually costs the company 1 - 3 million dollars in delayed entry and exits on trades.
This approach will allow router vendors to add fine scale delay and loss tracking at every router for little if any cost. This will obsolete expensive external network monitoring boxes at every router.
The way a router's performance is measured now is that an external hardware device tracks when a packet arrives and when it leaves and then takes the difference of those times.
Instead of tracking the entry and exit times of all packets going through a router, this computer code randomly divides the incoming packets into groups and then calculates the entry and exit times of each group. As long as the number of losses is smaller than the number of groups, at least one group will give a good estimate.
Calculating the difference of the groups arrival and departure times and then dividing by the total number of messages gives a very accurate estimate of the average delay of a given router. This approach requires so little computer programming code that it really is about the same code as a simple counter.
A data center network that has this programming code built in to every router will be able to quickly pinpoint a faulty router that is adding an extra millionth of a second delay or that is losing one packet in ten million. - 23196
About the Author:
Written by Lance Jepsen. For free stock trading advice by master stock traders and free stock charting software go to stock trading
posted by X - Men @ 2:13 AM
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