High Frequency Traders Turn to Towers for Competitive Advantage

According to Information Week Magazine: “A one (1) millisecond advantage in trading applications can be worth $100 million a year to a major brokerage firm.”  In the wireless arena it is referred to as “latency,” i.e., how much time it takes for a packet of data to get from one designated point to another.

Traders making millions of transactions a minute recognize the superiority of wireless for sending and receiving data. Jump Trading LLC recently installed microwave antennas across the street from the data center operated by CME Group, the world’s biggest futures exchange located just outside of Chicago. The development was precipitated by the need to submit trades faster, and the company is not alone. Many companies are installing microwave equipment around the facility to stay ahead of other competition. According to ZeroHedge.com, faster data transfers can make the difference between billions in profits or losses for traders. Placing microwave towers close to the CME data center, reduces the amount of time data is transferred by fiber-optic cable, and allows trading firms to operate faster.  

Among the other companies encroaching around the facility is McKay Brothers LLC and Webline Holdings LLC. McKay says it’s about to build the tallest microwave tower in the region. The company specializes in providing access to its microwave network to high-speed traders. It has approval to build a 350-foot high microwave tower close to CME Group. Webline has already installed microwave equipment on a utility pole near the data center.

Webline’s microwave network stretches from Illinois to New Jersey, where the Nasdaq data center is located, ensuring high speed transactions. While traders continue to jockey for better tower positions, CME announced it was considering allowing rooftop access, possibly by installing a microwave tower like the one next to the headquarters of the New York Stock Exchange.

May 16, 2017      

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