Anova Technologies is taking control of a microwave wireless network connecting Equinix’s key economic news distribution hub in Washington, DC to Nasdaq OMX’s data centre in Carteret, NJ. In so doing, it’s directly connecting news sources at lowest latency into the trading markets, allowing firms to trade from signals themselves, and not from responding to market movements driven by them. Think of it as the convergence of big data and low latency, for intelligent trading.
Instead of building the network, Anova has actually acquired an existing one – including tower leases, equipment and bandwidth – from the original owner, which founder and CEO Mike Persico suggests is a trading firm that decided it wanted to be a customer, not an owner of such infrastructure.
While offering the lowest latency route between DC and NJ is the USP for the microwave route – it is just 2.1 kilometres longer than the the theoretical possible set by the curvature of the earth – the driver is not necessarily the HFT marketplace. Says Persico: “News type trades are traditionally low frequency, yet require very low latency. You need a certain announcement once, but you need it first. One might say we’ve built the first network for the LFT crowd.”
From the Equinix facility, several news services – including from Thomson Reuters and Bloomberg – distribute key macro economic news, on interest rates, consumer activity and employment provided in a highly regulated manner by U.S. government departments and agencies. These news services parse text from news releases and provide key data in a machine readable format to the trading marketplace, where it acts as a primary driver of market activity across all asset classes. Allowing firms to act on the primary source, and not the subsequent market activity, drives the need for low latency.
Persico reckons customers will be attracted to the microwave route because it is future proof: “Bettering 2.1 kilometers off the curvature of the Earth’s surface, on this route, is well-nigh impossible without building new sites, which is time consuming and many times, cost prohibitive. What that translates to is we’re the fastest, for the near-, mid- and quite likely, long-term. And this fits in nicely with our philosophy of building or acquiring the end-game route.”
In order to improve reliability and capacity, and to reduce latency still further, Anova will be upgrading equipment on the route to its recently announced laser/millimetre technology.