Colocation

[Terry_ALE]

Understanding Colocation is one of the best ways to understand how important throughput and low latency has become in finance.  In some ways colocation is the electronic version of what has been happening in markets since their inception.  Those closest to the market, with the ability to decide faster have an advatage.

Equinix (http://www.equinix.com/industries/financial-exchange/) is one of the most popular and biggest colocation providers today.  Equinix's data centers house the exchange's matching engines (computers that cross trades) and firms pay to have their trading systems inside these same data centers all for the sake of reducing latency and higher throughput.  Reducing the numbers of network hops data makes is one way to do this.  Firms housed in here include big banks, hedge funds, prop trading firms, and others.

Exchanges such as NYSE are also setting up their own colocation facilities.  See this link for more information:http://www.nyse.com/pdfs/Colocation-NYSE-Euronext-US-Liquidity-Center.pdf.  Firms pay thousands of dollars a month (and more) based on space and power usage of the trading computers.

So with colocation once data enters one's trading computer or trade orders go out, the information can be received by the exchanges as quickly possible.  What happens inside the computer?  Well that is the part that LabVIEW FPGA and the FlexRIO platform can help with.

A Prevas Mimas Gigabit FlexRIO Adapter module connected to a FlexRIO card can have the FPGA process and generate network data faster and more deterministically than the best computers.  P2P can leverage multiple FPGAs if it runs out of room.  The FPGA can filter out unwanted data, preprocess data, and even watch for dangerous market events that can act as personal circuit breakers protecting a firms money....