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Shortwave Trading: The West Chicago Tower Mystery

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Re: Shortwave Trading: The West Chicago Tower Mystery

#81

Post by ubiyubix »

baxtr wrote: post #28
Jommi wrote: post #19

Weirdest thing I've read in a long while. The Author's comments refer to an internet forum thread[0] in German which discusses a German news article from this April.[1]However, it turns out this article is an April Fools text. Just digging deeper into the whole blog you can find something that can only be described as a fanfiction representation of "Flashboys", but in the context of this "Shortwave trading".[2] Is th…

German speaker here. The sentiment on heise.de comments is that this was an April’s Fools joke

The majority of Heise forum participants are wrong then.

Re: Shortwave Trading: The West Chicago Tower Mystery

#82

Post by retzkek »

johnohara wrote: post #67

> It showed a direct link between the West Chicago tower and another tower right by the Chicago Mercantile Exchange! It's pointing at the top of 10 South Canal, one of downtown Chicago's main tombstones for data communications. The building has 3-6 foot concrete walls, no windows for the first 23 stories and was reportedly designed to withstand an overhead nuclear blast. The standing joke used to be that if Chicago w…

The map shows he meant the CME Group's data center in Aurora: http://www.cmegroup.com/trading/colocation/co-location-servi...

Re: Shortwave Trading: The West Chicago Tower Mystery

#83

Post by cat199 »

tudorconstantin wrote: post #77
mathgenius wrote: post #66

Earlier quoted context omitted.

It's not amount of data but latency. A signal to buy is just one bit, but you need to get it before everyone else does.

Could an adversary send buy/sell fake signals and profit? Given the low bandwidth I assume they can't use very sophisticated authentication mechanisms

It would be extremely trivial to transport a time-keyed, completely random one-time-pad out of band (e.g. over a commodity internet link/vpn) so long as there is sufficient difference in bandwidth, and then simply XOR the data with it.. good luck cracking that.

and that's just what a few seconds of thinking came up with.

Re: Shortwave Trading: The West Chicago Tower Mystery

#84

Post by sniperinmahwah »

alexpil wrote: post #72
ropeadopepope wrote: post #49

Does anybody know what happened to Windy Apple Technologies? They promised the lowest latency microwave connection from NY to Chicago, then promptly disappeared...

I'm still around and in the industry. Never promised the lowest latency, but I was the first one by two years to build NY Chicago.

True.

Re: Shortwave Trading: The West Chicago Tower Mystery

#85

Post by neomantra »

Ftuuky wrote: post #69
dghughes wrote: post #68

I recall seeing I think on 60 Minutes HFT that wanted worse latency but I can't recall why. They have massive spools of fiber optics using them as a "resistor" (my term) to slow down the transmission. It seems to be the opposite of this but for the life of me I can't remember the advantage of doing it. Found it: https://www.theatlantic.com/business/archive/2016/06/iex-app...

I think you're referring to IEX, an exchange that adds a delay with those spools of fiber optics. According to wiki, "350 microsecond delay adds a round-trip delay of 0.0007 seconds and is designed to negate the certain speed advantages utilized by some high-frequency traders". https://en.wikipedia.org/wiki/IEX Edit: didn't saw your edit.

Unrelated to the 60 Minutes piece, but fiber is also spooled at network aggregation points within an exchange colo environment (at least NYSE Mahwah and NASDAQ Carteret) so that access is fair (equal latency) for all the customer cabinets.

Re: Shortwave Trading: The West Chicago Tower Mystery

#87

Post by johnohara »

retzkek wrote: post #82
johnohara wrote: post #67

> It showed a direct link between the West Chicago tower and another tower right by the Chicago Mercantile Exchange! It's pointing at the top of 10 South Canal, one of downtown Chicago's main tombstones for data communications. The building has 3-6 foot concrete walls, no windows for the first 23 stories and was reportedly designed to withstand an overhead nuclear blast. The standing joke used to be that if Chicago w…

The map shows he meant the CME Group's data center in Aurora: http://www.cmegroup.com/trading/colocation/co-location-servi...

The other thing to note is the proximity of the BNSF rail line. There are two 4-inch continuous PVC pipes next to the track, each with a gel-sealing 24-count fiber bundle inside. They run from downtown Chicago to Hinsdale to Aurora and beyond. They were installed about a year before Bershire-Hathaway purchased them.

Re: Shortwave Trading: The West Chicago Tower Mystery

#88

Post by jandrese »

dghughes wrote: post #68

I recall seeing I think on 60 Minutes HFT that wanted worse latency but I can't recall why. They have massive spools of fiber optics using them as a "resistor" (my term) to slow down the transmission. It seems to be the opposite of this but for the life of me I can't remember the advantage of doing it. Found it: https://www.theatlantic.com/business/archive/2016/06/iex-app...

The reason is that "the market" is made up multiple exchanges and to make a trade you need to do it on a specific exchange, but stocks are spread across all of the exchanges so if you need to make a big trade you have to send the trade order to several exchanges at once.

The problem is that HFT firms will see the trade hit the closest exchange (in terms of network latency), and then rush out to buy out all of the remaining shares of that stock at that price on the other exchanges (beating you because they HFT better) and relisting them at a higher price.

HFT firms will tell you that this is perfectly acceptable behavior because if you then buy the stock from them that the original person simply wasn't charging enough for it. They will also tell you that it improves liquidity, but that doesn't make sense either. It's not like they're sitting on the shares keeping the markets moving. All it does is add a tax to trades.

IEX delays the transactions just enough that the nanosecond advantages that HFT enjoys can't be used to front run trades.

Re: Shortwave Trading: The West Chicago Tower Mystery

#89

Post by jandrese »

dx034 wrote: post #38
JustSomeNobody wrote: post #24

Earlier quoted context omitted.

I can't imagine they'd need the TCP/IP stack. You might do better with something like: SOH EOH STX ETX CRC EOT Then the receiver would send an ACK or NACK. Repeat as necessary.

Would you even acknowledge? The data is worthless after one round-trip, so you wouldn't send it twice. The receiver just needs to make sure that they read information correctly and can deal with losses.

Wouldn't it be valuable to know if your trade actually occurred?

Re: Shortwave Trading: The West Chicago Tower Mystery

#90

Post by jandrese »

sandworm101 wrote: post #65

One has to wonder if this cutthroat competition will ever turn aggressive. Someone with a SDR and a bit of knowhow could shutdown/jam these systems very easily. The apparatus is in public view and they don't seem to be guarding their trash. A well-timed attack on a couple of these towers would create a few seconds of instability on the markets, enough time for another HFT platform to take advantage. A blast from a 1-…

They wouldn't call the cops, they would call the FCC. If you keep doing it they will catch you.
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