About a-team Marketing Services
The knowledge platform for the financial technology industry
The knowledge platform for the financial technology industry

A-Team Insight Blogs

Connectivity Providers Pile into Equinix LD4 to Offer Access to CBOE Futures Exchange

Subscribe to our newsletter

The Chicago Board Options Exchange (CBOE) is opening the CBOE Futures Exchange (CFE) to European trading markets through exchange hosting and low-latency connectivity solutions at the Equinix LD4 co-location data centre situated to the west of London. Initial market data access and connectivity set up by managed service provider GuavaTech is live at LD4 and the CBOE says, without naming names, that another firm plans to set up connectivity to the CFE at LD4 this weekend, while a further half dozen firms are in the process of providing connectivity.

GuavaTech had the capacity to route required data to London before the CFE decided to expand its reach to hedge fund and equity market participants in Europe, but now has a formal agreement with the exchange to provide market data access and co-location services at LD4. These allow European traders to access all CFE quotes and trades, including spreads. To encourage trading, the CFE is providing low-cost entry through LD4 with fee waivers until the end of this year.

The decision to open a hub in London follows CBOE’s move to the Equinix NY4 data centre in Secaucus, New Jersey in April 2012. NY4 houses not only the CBOE, but also the CFE, C2 Options Exchange, the CBOE Stock Exchange and OneChicago, a joint venture of CBOE, CME Group and Interactive Brokers.

Latency for users accessing the CFE from LD4 is around 70 milliseconds round trip, with the CBOE’s decision to relocate all its matching engines from Chicago to NY4 taking up to 20 milliseconds off the round trip to Chicago and lowering the cost of long haul connectivity. Mike Beling, director of business development at GuavaTech, comments: “The need for low latency depends on strategies, but LD4 can be a viable solution for local equity traders when combined with a high-performance network such as ours. If strategies require ultra-low latency, the need is to be located alongside the matching engine at NY4.”

At GuavaTech, the LD4 connection is expected to support existing clients wanting to take advantage of the products CFE offers as well as add new clients in London, most probably a similar outcome to that sought by other connectivity providers setting up at LD4 to offer access to the CFE.

These are early days for connectivity and trading, but for the CFE, the LD4 connection is key to growth. CFE senior managing director James Lubin, explains: “This year we opened our London hub to support our expansion into Europe. Since then, we have been working to create new, high-speed ways for our customers to receive data and to trade the most comprehensive array of volatility products in the world.”

With European access coming onstream, the CFE’s next logical step is a move into Asia-Pacific. This is unlikely to happen in the short-term, but the connectivity providers offering access to the CFE from LD4 will no doubt be looking to replicate their work if, and when, the CFE seeks to extend its reach.

Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: Unlock the Future of European Equities & Trading Technology: 2024 and Beyond!

In a world where the financial landscape is perpetually evolving, 2023 has brought widespread discussions around liquidity, regulatory shifts in the EU and UK, and advancements like the consolidated tape in Europe. For the year ahead in 2024, the European market is poised for transformative changes that will influence the future of trading technology and...

BLOG

Rapid Addition and Chainlink Bridge TradFi and DeFi with FIX-Native Blockchain Adapter

Rapid Addition, the provider of FIX connectivity solutions, has collaborated with Chainlink, the infrastructure for tokenised assets, to create a FIX-native blockchain adapter for institutional digital asset trading, built using Chainlink’s Cross-Chain Interoperability Protocol (CCIP). The strategic partnership aims to enhance interoperability between the traditional finance (TradFi) world of banks and financial institutions and the...

EVENT

TradingTech Summit London

Now in its 13th year the TradingTech Summit London brings together the European trading technology capital markets industry and examines the latest changes and innovations in trading technology and explores how technology is being deployed to create an edge in sell side and buy side capital markets financial institutions.

GUIDE

Entity Data Management Handbook – Fifth Edition

Welcome to the fifth edition of A-Team Group’s Entity Data Management Handbook, sponsored for the fourth year running by entity data specialist Bureau van Dijk, a Moody’s Analytics Company. The past year has seen a crackdown on corporate responsibility for financial crime – with financial firms facing draconian fines for non-compliance and the very real...