“Speed is shaking up the brokerage industry,” Business Week says. Brokerages and trading firms are co-locating their servers as close as possible, in a physical sense, to trading servers used by exchanges.
The reason? Fractions of a second advantages in placing trades. In fact, on Jan. 13, 2010 the Securities & Exchange Commission actually began reviewing high-speed trading, which since 2005 has grown to account for as much as 61 percent of U.S. stock market activity and 70 percent of individual trades, Business Week reports.
And Business Week writes that the speed of trading had something to do with the fact that
Goldman Sachs Group Inc. ousted JPMorgan Chase & Co. as the firm that got the best prices for its institutional clients during Bloomberg’s 12-month ranking period from July 1, 2008, to June 30, 2009.
During that time, stock volatility quadrupled from its 20- year average and the Dow Jones Industrial Average swung by more than 40 percent.
Goldman was the worldwide winner among brokers that handled at least $25 billion in trades in getting an average price closest to the stock level when the order was received, according to Ancerno.
“They have the most developed and advanced electronic systems,” says Roger Freeman, an analyst who covers brokerages and exchanges at Barclays Plc in New York. “They can get some of the fastest execution times on trades, thereby minimizing some potential costs.”
Kevin McPartland, a senior analyst at New York-based Tabb Group says Goldman’s operations were characterized by close and efficient working on the part of software and server technology teams, who were able to optimize the speed of trading.
“Equities is a technology business now,” McPartland says.
If you want to know how low-latency networks can make a difference in terms of business advantage, Goldman shows how.
http://www.businessweek.com/news/2010-01-29/goldman-tops-jpmorgan-as-best-broker-as-speed-shakes-up-trading.html
“Speed is shaking up the brokerage industry,” Business Week says. Brokerages and trading firms are co-locating their servers as close as possible, in a physical sense, to trading servers used by exchanges.
The reason? Fractions of a second advantages in placing trades. In fact, on Jan. 13, 2010 the Securities & Exchange Commission actually began reviewing high-speed trading, which since 2005 has grown to account for as much as 61 percent of U.S. stock market activity and 70 percent of individual trades, Business Week reports.
And Business Week writes that the speed of trading had something to do with the fact that
Goldman Sachs Group Inc. ousted JPMorgan Chase & Co. as the firm that got the best prices for its institutional clients during Bloomberg’s 12-month ranking period from July 1, 2008, to June 30, 2009.
During that time, stock volatility quadrupled from its 20- year average and the Dow Jones Industrial Average swung by more than 40 percent.
Goldman was the worldwide winner among brokers that handled at least $25 billion in trades in getting an average price closest to the stock level when the order was received, according to Ancerno.
“They have the most developed and advanced electronic systems,” says Roger Freeman, an analyst who covers brokerages and exchanges at Barclays Plc in New York. “They can get some of the fastest execution times on trades, thereby minimizing some potential costs.”
Kevin McPartland, a senior analyst at New York-based Tabb Group says Goldman’s operations were characterized by close and efficient working on the part of software and server technology teams, who were able to optimize the speed of trading.
“Equities is a technology business now,” McPartland says.
If you want to know how low-latency networks can make a difference in terms of business advantage, Goldman shows how.
by Gary Kim
http://www.businessweek.com/news/2010-01-29/goldman-tops-jpmorgan-as-best-broker-as-speed-shakes-up-trading.html
Tags: Goldman Sachs, low latency
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Wanted to share the latest white paper addressing low latency network for high frequency trading. It addresses market fragmentation, global diversity of trading venues and other trends for 2010.
http://knowledgeportalcfn.com/2010/01/trading-beyond-the-horizon-2010-2/
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