Opening Cross: ‘Location, Location, Location’ Is Only Half the Battle
![max-bowie max-bowie](/sites/default/files/styles/landscape_750_463/public/import/IMG/807/101807/max-bowie-incisivemedia-color.jpg.webp?h=ee12d8fd&itok=FIjEj0Li)
Whether you’re a fan of the FiDi, a sucker for the suburbs, hot for hipster ’hoods, or wild about wide open spaces, the “location, location, location” rule is as applicable as ever. In fact, in the capital markets, location is even more applicable than ever, since where you set up shop—or, to be more specific, where you host your latency-sensitive market data capture, analysis and trading systems—can have a big impact on how competitive you can be in the marketplace.
Basically, just as a London fashionista would ideally live steps from Sloane Square, or a country music wannabe must slum it in Nashville, being close to the things that matter is important. And for financial markets, that means trading firms want to be as close to the markets they trade on as possible, to minimize the length of latency-inducing cable or wavelength between them, so they (in theory) receive data before their rivals and can trade faster, enabling them to act on opportunities before others can respond. It also means that trading venues themselves want to make it easy for those trading firms to connect, and want to be as close to them as possible—even being close to rival trading venues, if it makes it easier for them to access a community of liquidity providers and clients.
Hence, following its merger and ensuing technology integration with Direct Edge, BATS Global Markets will move to Equinix’s NY5 datacenter—part of a campus of facilities on the same site operated by the hosting and datacenter provider that already hosts a range of equities, options, foreign exchange marketplaces, as well as a glut of the trading firms that already connect to those marketplaces.
“It’s hard to over-state the importance [of datacenter location],” says BATS global chief information officer Chris Isaacson. “These are critical decisions that are taken following many months in negotiations and discussions with customers. These decisions are long term, and you have to live with them for a long time—and your customers have to, too.”
Just like the home-worker mantra of “Work is something I do, not a place I go,” location becomes a matter of efficiency and accessibility. “Wall Street is just a street now—everything that used to go on there now takes place in datacenters in New Jersey,” says Stewart Orrell, managing director of global financial services at Equinix.
Of course, the more you can consolidate in central locations, the less that today’s “oceanographer traders” need to lug around a suitcase full of analysis and trading tools, as described by IPC’s Bart Bartolozzi in an Open Platform in this issue. But location isn’t just about getting the fastest access to a market: sometimes it’s simply about getting any kind of access to that market. For example, Fidessa is planning to connect to additional exchange markets across the Asia-Pacific region, and will initially “hub” the data through its new co-location presence at the Singapore Exchange, but will also consider setting up dedicated points of presence or even co-location sites in individual market centers based on client demand—even if, as Fidessa’s Asia-Pac business development head David Jenkins notes, some of those venues are not “fast markets” and don’t require the same level of low-latency access.
But location is only half of the equation. Any trading opportunity is about being in the right place at the right time. So once you’ve chosen your ideal spot, you still need to be able to spot and react to those opportunities as they arise. Hence the importance of Big Data analytics to trading algorithms, or smart fundamental and technical analysis to human traders, such as the new features unveiled by Recognia that allow users to customize the data they receive from its Technical Insight platform based on technical and fundamental criteria.
“Location, location, location” rings true as ever, but won’t do anything on its own, and depends on being accompanied by other factors that enable you to leverage that location. So when you locate, make sure you’ve also got leverage.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@waterstechnology.com
More on Emerging Technologies
This Week: Startup Skyfire launches payment network for AI agents; State Street; SteelEye and more
A summary of the latest financial technology news.
Waters Wavelength Podcast: Standard Chartered’s Brian O’Neill
Brian O’Neill from Standard Chartered joins the podcast to discuss cloud strategy, costs, and resiliency.
SS&C builds data mesh to unite acquired platforms
The vendor is using GenAI and APIs as part of the ongoing project.
Chevron’s absence leaves questions for elusive AI regulation in US
The US Supreme Court’s decision to overturn the Chevron deference presents unique considerations for potential AI rules.
Reading the bones: Citi, BNY, Morgan Stanley invest in AI, alt data, & private markets
Investment arms at large US banks are taken with emerging technologies such as generative AI, alternative and unstructured data, and private markets as they look to partner with, acquire, and invest in leading startups.
Startup helps buy-side firms retain ‘control’ over analytics
ExeQution Analytics provides a structured and flexible analytics framework based on the q programming language that can be integrated with kdb+ platforms.
The IMD Wrap: With Bloomberg’s headset app, you’ll never look at data the same way again
Max recently wrote about new developments being added to Bloomberg Pro for Vision. Today he gives a more personal perspective on the new technology.
LSEG unveils Workspace Teams, other products of Microsoft deal
The exchange revealed new developments in the ongoing Workspace/Teams collaboration as it works with Big Tech to improve trader workflows.