Ultra Tight Relative Timing in Finance Trading

Eduardo Ros, Javier Díaz, Pablo Marín, Andrés Rojo

Abstract: A huge number of news, data and trading actions are generated at a global scale every microsecond. And all this data and trading activity has impact among themselves, thus a tight relative timing between different sites in finance trading is mandatory. In the Finance sector the requirements of different actors may be different: transferring legal time from certified institutions to trading centers, time synchronization at a data center scale, deterministic timing for finely coordinated trading actions at a global scale, etc. Our contribution describes how to distribute deterministically a global notion of time across an optical fiber network to arrive at a tight relative timing (accurate time synchronization among the network elements). Another use case is related to low latency which is a highly demanded feature in specific segments (e.g. reduction in exchange latency improves market quality). Latency is a necessary condition for the implementation of various types of strategies and low latency automated trading is associated with lower quoted and effective spreads, lower volatility and greater liquidity. We describe how we can use latency control mechanisms for evaluating it in the framework of a service level agreement. In summary, actors in the Finance sector are adapting to the new situation, the millisecond (soon nanosecond) framework and we present an ultra-accurate solution for this target.
Published in: Proceedings of the 48th Annual Precise Time and Time Interval Systems and Applications Meeting
January 30 - 2, 2017
Hyatt Regency Monterey
Monterey, California
Pages: 88 - 92
Cite this article: Ros, Eduardo, Díaz, Javier, Marín, Pablo, Rojo, Andrés, "Ultra Tight Relative Timing in Finance Trading," Proceedings of the 48th Annual Precise Time and Time Interval Systems and Applications Meeting, Monterey, California, January 2017, pp. 88-92.
Full Paper: ION Members/Non-Members: 1 Download Credit
Sign In