Value of Time Only Goes Up in Finance Industry
October 16, 2013
Sometimes 5 minutes can seem like an eternity, but how about 5 milliseconds? Most of us probably do not notice that fragment of a second, but computers certainly do. And in the world of finance, their end users following stocks quickly rising and falling do too. Popular Mechanics discusses this topic in light of a once-in-a-decade type of event: “New Transatlantic Cable Built to Shave 5 Milliseconds off Stock Trades.”
The last transatlantic cable was laid ten years ago and in the past, those cables have carried voice or internet data. Since most trades are conducted automatically where algorithms execute sales and purchases, those 5 milliseconds really matter.
There are some that say finance may be running at too fast of a speed. The article states:
“But there is one big bump in the road: Information and transactions now move so quickly that some regulators worry it’s too fast. Congress became leery of automated trading after its lightning-fast trades helped stoke the May 6, 2010 “flash crash” that dropped the Dow Jones Industrial Average more than about 1000 points. The market recovered within minutes, but the incident alarmed regulators.”
Unfortunately, the article did not disclose the cost of this effort. Needless to say, the price of real-time is not cheap.
Megan Feil, October 16, 2013
Sponsored by ArnoldIT.com, developer of Augmentext
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