“High-frequency trading (HFT) is the extremely rapid trading of securities through the use of sophisticated hardware and software, enhanced by positioning this hardware in very close physical proximity to exchange servers for minimum latency. HFT participants are the investment banks and market participants. Trading generally occurs at millisecond (thousandth of second) and microsecond (millionth of a second) intervals. Perhaps 60%-70% of all equity volume in the United States is HFT.
If you want to play the HFT game, you’d better find a way to get close to the action, and I mean very close – housing your equipment in the same facility as the exchanges, with direct, raw feeds, hopefully closer to exchange servers than anyone else. This is meant to reduce latency to its lowest possible level. To illustrate the importance of minimizing latency, and underscore the size of this business, Hibernia Atlantic, which provides transatlantic connectivity to a variety of customers, is laying a cable that will beat existing routes, offering 60 millisecond latency. By comparison, it takes the human eye 350 milliseconds to blink. This cable will be part of Hibernia’s Global Financial Network, essentially dedicated to HFT. ”
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