December 6, 2008
The Faster Trade is Fixed Wireless
By Shane Hampton, Vice President - Market Development, Business Only Broadband
Ultra low latency requirements make the case for Fixed Wireless. The profitability of electronic trading is dependent on low latency connectivity to the financial exchanges and their market data. In the April 2008 TABB Group Research Note on the value of a millisecond they stated: “TABB Group estimates that if a broker’s electronic trading platform is 5 milliseconds behind the competition, it could lose at least 1% of its flow; up to 10 milliseconds of latency could result in a 10% drop in revenues. From there it gets worse; if a trader is 100 milliseconds slower than the fastest trader they might as well shut down their FIX engine and become a floor broker.”
Fixed Wireless networks are reliable, safe and secure. Fixed wireless networks are now being used for connectivity to financial exchanges, data centers, corporate offices, and other critical facilities. These networks have passed the most stringent government and industry mandates for security and reliability making this technology a dependable alternative to fiber optic networks.
Further making the case for Fixed Wireless is the need for true diversity. The Financial Exchanges and the Federal Government mandate redundant connections and diversity in trading networks. Fixed Wireless is widely recognized by analysts and industry leaders as the best practice for optimizing network survivability; assuring mission critical circuits have no common point of failure in the building, street or central office.
Total Cost of Ownership for Fixed Wireless should be valued by combining the benefits of ultra low latency and the true diversity these networks provide. The cost benefit analysis for deploying Fixed Wireless in the trading network should combine the value of beating your competitor to the trade plus avoiding the potential cost of a service interruption or network outage during the trading day.
Shane Hampton is the vice president of market development for Business Only Broadband (BOB®), a company he co-founded with Richard Kingston in late 2005. Talk to BOB® Toll-Free Customer Support: 877-262-4553 or visit www.bobbroadband.com.
To see the original as seen in the Ticker Magazine of the Wall Street Technology Association visit: www.wsta.org
