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Sources of Latency in Optical Systems Used by Financial Customers

Tuesday, August 24th, 2010
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Sources of Latency in Optical Systems Used by Financial Customers
Every optical-transport function that is intended to contribute to the successful beaming of traffic across fiber connections can inject small amounts of latency into the process. Today’s financial network manager must be cognizant of all of them.
Color conversion (“Transponding” and “muxponding” ) are two common sources of delay. When traffic is readied for transport across a Wavelength Division Multiplexing (WDM) optical network, it’s converted to a color of light to be carried across the glass fiber. This is transponding.
Additionally, in many cases, lower-speed traffic, such as a 1 Gbps information feed, is aggregated into a higher-speed signal such as a 10 Gbps transport link. When multiple feeds are muxponded, significant latency can occur
Optical amplification also can produce latency in a financial network.  The “Erbium-Doped Fiber Amplifier” (EDFA) can introduce microseconds of latency, so financial network managers should instead demand amplifier designs that have been specifically engineered for the contemporary low-latency challenge.
Dispersion compensation is another potential source of latency. At higher speeds, such as 10 Gbps, optical data signals sometimes smear into a rainbow of colors within a fiber cable. It’s an effect called “chromatic dispersion” and its effects can include an increasing degradation of the data signal over distance.
There are fiber Bragg gratings (FBGs) that have been designed to offset dispersion while introducing only negligible delay. In some cases the alternative is to rely on hundreds of kilometers of dispersion-compensating fiber (DCF) that is ill-suited for low-latency applications.
Electrical signal regeneration likewise introduces additional latency. Conventional regeneration techniques may yield hundreds of microseconds of delay. State-of-the-art low-latency techniques will introduce latency of only nanoseconds.
http://communication-solutions.tmcnet.com/topics/optical-access/articles/96342-wringing-latency-from-financial-networks.htm

Every optical-transport function that is intended to contribute to the successful beaming of traffic across fiber connections can inject small amounts of latency into the process. Today’s financial network manager must be cognizant of all of them.

Color conversion (“Transponding” and “muxponding” ) are two common sources of delay. When traffic is readied for transport across a Wavelength Division Multiplexing (WDM) optical network, it’s converted to a color of light to be carried across the glass fiber. This is transponding.

Additionally, in many cases, lower-speed traffic, such as a 1 Gbps information feed, is aggregated into a higher-speed signal such as a 10 Gbps transport link. When multiple feeds are muxponded, significant latency can occur

Optical amplification also can produce latency in a financial network.  The “Erbium-Doped Fiber Amplifier” (EDFA) can introduce microseconds of latency, so financial network managers should instead demand amplifier designs that have been specifically engineered for the contemporary low-latency challenge.

Dispersion compensation is another potential source of latency. At higher speeds, such as 10 Gbps, optical data signals sometimes smear into a rainbow of colors within a fiber cable. It’s an effect called “chromatic dispersion” and its effects can include an increasing degradation of the data signal over distance.

There are fiber Bragg gratings (FBGs) that have been designed to offset dispersion while introducing only negligible delay. In some cases the alternative is to rely on hundreds of kilometers of dispersion-compensating fiber (DCF) that is ill-suited for low-latency applications.

Electrical signal regeneration likewise introduces additional latency. Conventional regeneration techniques may yield hundreds of microseconds of delay. State-of-the-art low-latency techniques will introduce latency of only nanoseconds.

http://communication-solutions.tmcnet.com/topics/optical-access/articles/96342-wringing-latency-from-financial-networks.htm


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Level 3 Launches BATS Europe Low-Latency Service

Tuesday, August 17th, 2010
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Level 3 Launches BATS Europe Low-Latency Service
Level 3 Communications now has direct connectivity into global financial markets technology company BATS Europe, giving Level 3’s European financial services customers access to Level 3’s international Tier 1 backbone and low-latency trading execution from Europe to North America.
The new offering includes options for metro and inter-city connectivity as well as direct connection to Level 3’s low-latency, trans-Atlantic routes with diverse landing stations to better facilitate security and business continuity.
BATS Europe, launched on the 31 October 2008, is one of the leading pan-European markets, with market share of 8-10 percent in the FTSE 100, 7 percent of the SMI and 5-6 percent across the 15 European markets in which it operates.
http://www.marketwatch.com/story/level-3-to-provide-direct-connectivity-into-bats-europe-2010-08-12?reflink=MW_news_stmp

Level 3 Communications now has direct connectivity into global financial markets technology company BATS Europe, giving Level 3’s European financial services customers access to Level 3’s international Tier 1 backbone and low-latency trading execution from Europe to North America.

The new offering includes options for metro and inter-city connectivity as well as direct connection to Level 3’s low-latency, trans-Atlantic routes with diverse landing stations to better facilitate security and business continuity.

BATS Europe, launched on the 31 October 2008, is one of the leading pan-European markets, with market share of 8-10 percent in the FTSE 100, 7 percent of the SMI and 5-6 percent across the 15 European markets in which it operates.

http://www.marketwatch.com/story/level-3-to-provide-direct-connectivity-into-bats-europe-2010-08-12?reflink=MW_news_stmp


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High-Frequency Trading Drives Communication Choices

Thursday, August 5th, 2010
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A nice discussion of high-frequency trading, which accounts for roughly half of the daily equity trade volume in the United States, can be found here:http://assetinternational.com/ai5000/channel/TECHNOLOGY_PRODUCTS/Adventures_in_Algorithmic_Trading.html.
High-frequency trading is important for communications service providers because the trading hinges on blinding speed, which so long as trading centers are geographically separated, means transmission latency makes a big difference.
A nice discussion of high-frequency trading, which accounts for roughly half of the daily equity trade volume in the United States, can be found here: http://assetinternational.com/ai5000/channel/TECHNOLOGY_PRODUCTS/Adventures_in_Algorithmic_Trading.html.
High-frequency trading is important for communications service providers because the trading hinges on blinding speed, which so long as trading centers are geographically separated, means transmission latency makes a big difference.

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